The Great Powers Index: 2024

How the Leading 24 Countries

Are Doing and Their Prospects
for the Next 10 Years

RAY DALIO

This report shows past and current levels of strength, health, and happiness,
and projected 10-year real future growth rates for the 24 major countries.

Part 1 provides summaries of these findings for all 24 countries, Part 2 focuses
on the highlights, and Part 3 provides summary descriptions of each of the 24
countries’ circumstances. The appendix provides more granular measures.

[As of July 31, 2024.]

© 2024 RAY DALIO

THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

TABLE OF CONTENTS

Part 1: Overview............................................................................................................................2

Part 2: The Most Important Facts and Charts............................................................................7

Part 3: Country Summaries........................................................................................................ 13

United States..................................................................................................................................................... 14
China................................................................................................................................................................ 18
Eurozone........................................................................................................................................................... 22
Germany........................................................................................................................................................... 24
Japan.................................................................................................................................................................. 28
Korea................................................................................................................................................................. 32
India.................................................................................................................................................................. 36
United Kingdom...............................................................................................................................................40
France................................................................................................................................................................44
Russia................................................................................................................................................................ 48
Singapore.......................................................................................................................................................... 52
Australia............................................................................................................................................................ 56
Turkey............................................................................................................................................................... 60
Canada.............................................................................................................................................................. 64
Switzerland....................................................................................................................................................... 68
Brazil................................................................................................................................................................. 72
Netherlands....................................................................................................................................................... 76
Indonesia........................................................................................................................................................... 80
Italy................................................................................................................................................................... 84
Spain................................................................................................................................................................. 88
Saudi Arabia...................................................................................................................................................... 92
Mexico.............................................................................................................................................................. 96
South Africa.................................................................................................................................................... 100
Argentina........................................................................................................................................................ 104
Future Growth Readings for Countries Not Listed Above........................................................................... 108

Appendix: More Detail on Each of the Gauges.................................................................... 132

Descriptions of Each of the Gauges............................................................................................................... 132
Considering Quality versus Quantity and the Size of Countries................................................................... 135
Measuring Well-Being................................................................................................................................... 136
Measuring Future Growth Prospects............................................................................................................. 137
Data Sources................................................................................................................................................... 183

1
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PART 1: OVERVIEW

I
n this report I show, for each of 24 major countries, their 1) levels of strength as measured by a number
of indicators showing different types of strength (e.g., GDP, share of world trade, education levels, military
strength), 2) levels of health, as measured by bodily health indices (e.g., life expectancy, child mortality rates,
chronic diseases), 3) levels of happiness, as measured by several measures (e.g., surveyed happiness and
satisfaction with life, suicide rates, reported daily enjoyment), and 4) projected economic growth prospects as
measured by real growth rates over the next 10 years. These indices are based on 21 gauges showing the types of
measures, with each gauge being made up of several hundred indicators. Besides being measures of well-being,
these measures are also effective KPIs for measuring how well governments are doing to improve conditions.
By showing and separating strength, health, and happiness, I hope to prompt thinking about their rel-
ative importance as well as to convey a richer picture than would otherwise be conveyed. I hope that will
prompt people and their leaders to think about what they are going after (e.g., what mix of strength, health,
happiness, and real economic growth) and how to get those things. The differences between them are often
striking and pursuing one or some of these can be at the expense of others. For example, the United States,
by our measure the strongest country, has only the 14th strongest projected growth rate based on long-term
leading indicators of growth and ranks 10th and 14th in terms of happiness and health, respectively. While
India has the highest projected real growth rate, it ranks 23rd in terms of health, and ranks last in terms of hap-
piness. The United Kingdom, which ranks best on happiness, is the 8th strongest, the 6th healthiest, and the
15th best for expected growth. The table below shows the total strength, health, happiness, and projected
growth rates for the 24 major countries that I measure. The numbers speak for themselves, so I suggest you
spend a couple of minutes scanning them.

2
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Strength Gauge Future Real Growth Estimate

Health Happiness
Average
Total Per Capita Gauge Gauge Total Per Capita

United States 0.89 0.71 1.33 0.98 1.4% 1.2% 1.12

China 0.80 0.30 1.27 1.20 4.0% 4.3% 1.28

Eurozone 0.56 0.43 2.15 0.88 0.2% 0.9% 0.80

Germany 0.38 0.54 2.06 0.85 -0.5% 0.6% 0.46

Japan 0.33 0.40 2.42 0.56 1.2% 1.9% 0.57

Korea 0.32 0.54 2.30 -0.16 1.8% 3.0% 0.40

India 0.30 0.07 -1.41 -0.55 6.3% 5.3% -0.25

United Kingdom 0.29 0.46 2.29 1.65 1.3% 0.9% 0.77

France 0.27 0.45 2.19 0.98 0.9% 1.0% 0.51

Russia 0.26 0.28 0.04 0.00 2.9% 3.1% -0.10

Singapore 0.24 0.89 2.45 0.48 2.6% 2.8% 0.58

Australia 0.23 0.56 2.27 1.27 2.1% 1.5% 0.67

Turkey 0.21 0.28 0.66 -0.06 4.0% 3.6% 0.08

Canada 0.21 0.50 2.21 1.21 1.2% 0.9% 0.53

Switzerland 0.19 0.66 2.34 1.30 0.2% 0.5% 0.48

Brazil 0.18 0.14 0.29 1.06 1.7% 1.6% 0.02

Netherlands 0.17 0.55 2.13 1.50 1.2% 1.4% 0.54

Indonesia 0.17 0.13 -0.36 1.58 5.5% 4.8% 0.32

Italy 0.17 0.31 2.22 0.83 -0.5% 0.6% 0.23

Spain 0.17 0.34 2.31 0.76 0.3% 1.0% 0.31

Saudi Arabia 0.15 0.45 1.14 0.54 4.6% 3.0% 0.32

Mexico 0.14 0.15 0.04 1.41 2.5% 1.7% 0.08

South Africa 0.10 0.12 -1.73 0.13 2.9% 1.9% -0.72

Argentina 0.07 0.14 0.88 0.94 2.0% 1.2% 0.03

The strength gauge is reported as an index from 0 to 1 (higher = stronger power), the happiness/health gauges are reported as Z scores (higher =
better), and the future real growth estimates are reported as annualized growth rates. The average columns shows an equal average of Z scores for
strength, health, happiness, and expected growth.

These four gauges are aggregate indices made up of several sub-gauges, which are each based on many
measures. They can be disaggregated to provide a more granular picture. For example, the strength gauge
includes several measures of the size of the economy, the strength of its currency as a reserve currency, the
strength of its capital markets, several measures of military strength, measures of internal and external order,
levels of education, innovation and trade competitiveness, geographic advantages such as natural resources,
investment in infrastructure, character and civility, and prevalence of the rule of law. Under each of these
sub-categories that make up the aggregate, more granular pictures are gained by looking at the more granular
measures, of which there are an average of 150 per country. You can see the most important of these un-
derlying elements in more detail on the next few pages. In the appendix, you can see the most important
individual indicators across countries to see how they compare. While there are a lot of numbers that one
can choose to try to digest to get both big and detailed pictures of these 24 countries and their relationships
with each other, in “Part 2: The Most Important Facts and Charts” and “Part 3: Country Summaries,” you can
get the highlights.
To be clear, these indices are broadly indicative rather than precise measures of the country as a whole.
As I am constantly improving them, I expect to make them increasingly precise and to create an increasingly

3
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

granular picture geographically and by people’s characteristics (e.g., by income quintile, education level, etc.).
I am constantly learning and incorporating my learnings into the updated versions of this report. I first
shared my computerized assessments of 11 major powers in my book, Principles for Dealing with the Changing
World Order, and as promised in the book, I have been sharing my latest learnings each year. Building this sys-
tem is a never-ending work in progress. I hope that you will join me in this process of learning, by evaluating
my readings and giving me feedback when they sound inaccurate to you. I also hope that these objective mea-
sures will lead people to objectively assess policy makers’ moves and that that will lead either to better policies
or to better policy makers who will make better policies.
Next, I lay out how I am reading conditions in each major country today and then summarize notable
shifts in recent years. The rest of this report goes into computer-generated summaries of each country and
then much more detail on how each measure is constructed.

THE MAJOR DETERMINANTS ACROSS THE WORLD

The table below shows the major sub-categories as well as the aggregate gauge shown on the prior page.
The arrows to the right of the numbers show whether it is improving or weakening. For example, at the top
of the table is the total strength reading and the trend over the last 3 and 20 years, and below the top line
numbers are gauges that show the major types of strength. The next major section of the table shows the
projected next 10-year growth estimate, the numbers below it show the determinants of these estimates,
and the arrows next to it show the trends. We finish with the well-being gauges and gauges showing where
countries are in the “Three Big Cycles.” While the table below might look like a bunch of numbers and arrows
at first glance, when you get into it a clearer picture will emerge. If you have questions and thoughts, you can
drop them into the comments box, which will help us answer your questions and improve.
In these measures of strength, I considered both quantity (i.e., total size) and quality (i.e., per capita). Be-
cause the data quality of the gauges measuring these factors varies, to convey that I indicate whether it’s reliable
or so-so. For each determinant below, the first column shows the determinant being measured. There are other
determinants that aren’t shown because they are either too subjective or too difficult to quantify (e.g., leader-
ship). The rest of the columns show each country’s score on each determinant, as well as the recent trend in
that score. Where we do not have enough data to make a gauge or enough history to display an arrow, we show
dashes to indicate no reading. I suggest that you take a few minutes to scan these tables, which paint a broad
picture of what each of these countries and the world looks like. I know that there’s a lot here to wade through
so, if you prefer to skip, you can jump directly to “Part 2: The Most Important Facts and Charts” and then go
to the country summaries that interest you in Part 3.

4
 THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE MAJOR DETERMINANTS ACROSS THE WORLD

CURRENT
Current Readings Across Major Powers (Z-Score, READINGS
5yr and 20yr Change) ACROSS MAJOR POWERS (Z-SCORE, 3YR AND 20YR CHANGE)
Chg: Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y
Gauge
United States China Eurozone Germany Japan Korea India United Kingdom France Russia Singapore Australia
Quality
Strength Gauge (0-1) 0.89 0.80 0.56 0.38 0.33 0.32 0.30 0.29 0.27 0.26 0.24 0.23
Key Eight Measures of Power
Education Reliable 2.0 1.6 0.5 -0.3 0.1 0.2 -0.8 -0.1 -0.6 -0.7 -0.5 -0.3
Innovation and Technology Reliable 1.9 1.8 0.2 -0.2 0.0 0.3 -1.1 -0.3 -0.4 -0.7 -0.5 -0.6
Competitiveness Reliable -0.4 1.0 -0.6 -0.8 0.0 0.1 2.4 -0.5 -0.7 0.9 0.1 -0.4
Military Reliable 2.1 0.9 -0.1 -0.7 -0.4 -0.3 0.4 -0.1 -0.2 0.6 -1.1 -0.7
Trade Reliable 1.3 1.7 1.2 0.5 -0.6 -0.7 -0.7 -0.5 -0.5 -1.0 -0.6 -1.1
Economic Output Reliable 1.7 1.6 1.0 -0.2 -0.2 -0.9 0.1 -0.6 -0.6 -0.5 -1.5 -1.3
Financial Center Reliable 2.7 0.2 0.4 -0.1 -0.1 -0.3 -0.6 0.0 -0.2 -1.3 -0.3 -0.3
Reserve Currency Status³ Reliable 1.9 -0.6 0.2 --- --- --- -0.4 -0.7 --- -0.7 -0.4 --- --- --- -0.7 --- -0.7 --- -0.6 ---
Additional Measures of Power
Geology Reliable 1.6 0.6 -0.8 -0.6 -0.9 -0.8 0.2 -0.8 -0.5 2.0 -0.5 1.9
Resource Allocation Efficiency So-So 2.0 0.7 -0.8 0.6 0.6 -0.1 0.2 -0.4 -1.3 -0.2 --- 2.1 -0.4
Acts of Nature So-So -0.2 --- 0.0 --- 0.1 --- 1.2 --- 1.4 --- 1.7 --- -2.4 --- 0.4 --- -0.1 --- -0.1 --- -0.2 --- 1.5 ---
Infrastructure & Investment Reliable 0.9 2.5 0.5 -0.4 -0.1 0.0 -0.4 -0.6 -0.3 -1.2 -0.2 -0.7
Character/Determination/Civility So-So 1.1 1.4 -1.0 -0.5 0.2 0.9 1.4 -0.3 -1.5 0.3 2.7 0.2
Governance/Rule of Law Reliable 0.7 -0.4 -0.5 --- 0.7 0.8 -0.1 -1.2 1.0 0.4 -2.0 2.4 0.9
Future Growth Estimate Reliable 1.4% 4.0% 0.2% -0.5% 1.2% 1.8% 6.3% 1.3% 0.9% 2.9% --- 2.6% 2.1%
Working-Age Pop. Growth Reliable 0.2% -0.4% -0.7% -1.1% -0.8% -1.2% 0.9% 0.4% -0.1% -0.3% -0.2% 0.6%
Growth Per Worker Estimate Reliable 1.2% 4.3% 0.9% 0.6% 1.9% 3.0% 5.3% 0.9% 1.0% 3.1% --- 2.8% 1.5%
Productivity (income adjusted) Reliable -0.2 2.3 -1.2 -1.0 0.4 0.9 4.5 -0.5 -1.2 1.2 1.4 -0.6
What You Pay vs. What You Get Reliable -0.5 1.6 -0.8 -1.0 0.1 0.2 3.5 -0.6 -0.8 1.4 0.2 -0.5
Education Reliable -0.2 1.5 -0.9 -0.9 0.8 1.1 1.6 0.0 -1.4 1.4 0.9 -0.3
Labor Productivity Reliable -0.2 1.2 0.1 0.1 0.7 1.0 1.5 0.1 -0.2 1.4 --- 1.0 -0.2
Working Hard Reliable -1.6 0.2 -2.0 -2.2 -1.3 -1.3 2.2 -1.5 -1.9 -0.3 -0.9 -1.6
Investing Reliable -0.6 1.6 -0.6 -0.7 0.0 -0.1 3.6 -0.9 -0.5 0.5 --- -0.2 -0.5
Culture Reliable 0.6 1.4 -0.6 0.0 0.5 1.3 2.0 0.2 -0.8 -0.2 2.2 -0.2
Corruption Reliable -0.7 0.9 0.0 0.6 1.1 -0.8 3.8 0.6 0.1 -0.9 0.8 0.1
Bureaucracy Reliable 1.4 3.0 0.5 1.3 1.6 1.3 3.9 1.9 0.7 1.8 3.0 0.9
Rule of Law Reliable 0.5 1.4 -0.2 0.2 1.2 0.9 1.8 1.1 0.4 -0.3 2.4 0.6
Savoring Life vs. Achieving Reliable 0.6 0.7 -1.6 -1.2 -0.5 0.3 0.9 -1.4 -2.5 -0.8 2.1 -0.7
Innovation Reliable 2.1 2.0 0.2 1.5 1.1 6.0 1.2 0.7 0.0 -0.5 2.3 -1.0
Self Sufficiency Reliable 0.0 0.6 -2.8 -2.3 -1.1 -0.2 0.4 -1.5 -3.6 -0.7 2.5 -1.2
Indebtedness Reliable -1.3 -0.7 -1.1 -1.7 -1.3 -1.0 1.0 -1.9 -1.0 0.5 -0.9 0.0
Wellbeing
Happiness Index Reliable 1.0 --- 1.2 --- 0.9 --- 0.9 --- 0.6 --- -0.2 --- -0.5 --- 1.7 --- 1.0 --- 0.0 --- 0.5 --- 1.3 ---
Health Index So-So 1.3 --- 1.3 --- 2.2 --- 2.1 --- 2.4 --- 2.3 --- -1.4 --- 2.3 --- 2.2 --- 0.0 --- 2.4 --- 2.3 ---
Three Big Cycles
Economic/Financial Position Reliable -1.6 0.1 -0.9 -0.3 -0.9 0.1 1.0 -1.6 -1.1 0.0 --- 0.2 -0.4
Debt Burden Reliable -1.9 -0.2 -0.4 0.8 -0.9 0.6 0.3 -1.9 -1.0 0.0 0.4 -0.4
Expected Growth Reliable -0.6 0.3 -1.0 -1.3 -0.7 -0.5 1.1 -0.7 -0.8 -0.1 --- -0.2 -0.4
Internal Order So-So -1.5 0.4 0.2 0.5 1.3 --- --- --- --- --- --- -0.6 0.4 -1.8 --- --- --- --- --- ---
Wealth/Values Gap So-So -1.8 0.4 0.0 0.5 0.9 0.7 0.0 -0.1 0.8 -2.0 -2.1 0.6
Internal Conflict¹ Reliable -1.1 0.4 0.3 0.5 1.7 --- --- --- --- --- --- -1.1 0.0 -1.6 --- --- --- --- --- ---
External Order² So-So -1.0 -1.0 0.2 --- --- --- 0.3 --- --- --- --- --- --- 0.3 --- --- --- -1.2 --- --- --- --- --- ---

Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y
Gauge
Turkey Canada Switzerland Brazil Netherlands Indonesia Italy Spain Saudi Arabia Mexico South Africa Argentina
Quality
Strength Gauge (0-1) 0.21 0.21 0.19 0.18 0.17 0.17 0.17 0.17 0.15 0.14 0.10 0.07
Key Eight Measures of Power
Education Reliable -1.8 -0.3 -0.5 -1.3 -0.8 -1.8 -1.0 -0.9 -1.2 -1.5 -1.7 -1.8
Innovation and Technology Reliable -0.9 -0.7 -0.3 -1.0 -0.4 -1.2 -0.8 -0.9 -1.2 -1.3 -1.2 -1.2
Competitiveness Reliable 1.1 -0.5 -1.2 0.7 -0.8 1.6 -0.6 -0.5 0.5 --- 0.7 0.8 0.6
Military Reliable -0.5 -1.0 -2.0 -0.5 -1.7 -0.6 -0.5 -0.8 -0.7 -1.1 --- -1.2 -1.0
Trade Reliable -1.1 -0.8 -0.8 -1.1 -0.6 -1.2 -0.7 -0.9 -1.1 -0.8 -1.3 -1.3
Economic Output Reliable -0.7 -1.1 -1.4 -0.7 -1.4 -0.8 -0.8 -1.0 -1.2 -0.8 -1.2 -1.2
Financial Center Reliable -1.1 -0.3 -0.3 -0.8 -0.4 -1.0 -0.6 -0.6 -0.8 -1.1 -0.8 -1.2
Reserve Currency Status³ Reliable -0.7 --- -0.6 --- -0.7 -0.7 --- --- --- --- -0.7 --- --- --- --- --- --- --- -0.7 --- -0.7 --- -0.7 --- -0.7 ---
Additional Measures of Power
Geology Reliable -0.6 0.7 -0.4 1.9 -0.4 0.4 -0.7 -0.5 0.3 -0.3 -0.2 -0.3
Resource Allocation Efficiency So-So -0.4 0.3 -0.4 -1.4 0.1 0.5 -2.2 -1.4 0.2 -0.4 -0.6 -2.2
Acts of Nature So-So -0.1 --- 1.3 --- 1.3 --- -2.4 --- 0.5 --- -2.2 --- -1.0 --- -0.7 --- -1.8 --- -1.2 --- -2.1 --- -2.1 ---
Infrastructure & Investment Reliable -0.4 -0.7 -0.2 -1.1 -0.4 -0.5 -0.7 -0.5 -0.6 -1.1 -1.0 -1.5
Character/Determination/Civility So-So -0.1 0.1 0.3 -0.9 -0.3 1.4 -1.4 -1.0 2.3 1.6 -0.5 --- -0.2
Governance/Rule of Law Reliable -1.2 0.6 1.2 -2.4 1.1 -1.4 -1.8 -0.7 0.5 -2.3 -1.5 -2.4
Future Growth Estimate Reliable 4.0% 1.2% 0.2% --- 1.7% 1.2% 5.5% -0.5% 0.3% 4.6% --- 2.5% 2.9% 2.0%
Working-Age Pop. Growth Reliable 0.4% 0.3% -0.3% 0.1% -0.2% 0.7% -1.1% -0.7% 1.6% 0.8% 1.0% 0.8%
Growth Per Worker Estimate Reliable 3.6% 0.9% 0.5% --- 1.6% 1.4% 4.8% 0.6% 1.0% 3.0% --- 1.7% 1.9% 1.2%
Productivity (income adjusted) Reliable 1.7 -0.8 -1.2 0.5 -0.7 3.1 -1.8 -1.3 1.2 --- 0.8 1.1 0.4
What You Pay vs. What You Get Reliable 1.7 -0.6 -1.6 1.1 -1.0 2.4 -0.7 -0.5 0.8 --- 1.1 1.3 0.9
Education Reliable 1.1 0.1 -2.1 1.3 -1.5 1.5 -0.3 -0.1 0.7 --- 1.3 --- --- --- 1.2
Labor Productivity Reliable 1.6 0.2 -1.6 1.3 -0.2 1.4 0.3 0.5 1.3 --- 1.3 1.4 1.2
Working Hard Reliable -0.6 -1.6 -2.0 -0.8 -2.0 1.2 -2.0 -1.9 0.0 --- 0.4 -0.7 --- 0.1
Investing Reliable 0.9 -0.9 -0.8 1.0 -0.6 2.6 -0.5 -0.4 0.3 0.0 1.4 0.0
Culture Reliable 0.1 -0.3 0.7 -1.2 0.5 1.3 -2.2 -1.4 0.7 -0.5 -0.3 -1.0
Corruption Reliable 0.3 0.2 0.1 -0.5 0.9 1.8 -1.5 -0.8 0.1 -1.3 0.5 0.0
Bureaucracy Reliable 1.9 1.1 0.9 -1.5 1.1 2.5 -1.2 -0.1 2.4 0.6 1.3 -0.1
Rule of Law Reliable 0.7 0.4 0.0 -0.6 0.2 1.1 -2.1 0.1 1.6 -0.5 1.5 -0.7
Savoring Life vs. Achieving Reliable -1.0 -0.9 -1.3 -2.2 -1.5 0.5 -2.0 -1.5 2.0 --- 0.4 -1.5 --- -1.7
Innovation Reliable 0.0 -1.4 4.5 -0.4 3.8 1.0 -2.6 -2.8 -3.4 -3.5 -1.7 -2.1
Self Sufficiency Reliable -1.4 -1.1 -0.2 -2.2 -1.5 0.9 -3.8 -3.3 1.6 1.2 -2.0 --- -1.2
Indebtedness Reliable -0.3 -0.8 -1.0 --- -0.2 -0.9 1.6 -0.8 -0.7 0.8 --- 0.3 0.4 -1.0
Wellbeing
Happiness Index Reliable -0.1 --- 1.2 --- 1.3 --- 1.1 --- 1.5 --- 1.6 --- 0.8 --- 0.8 --- 0.5 --- 1.4 --- 0.1 --- 0.9 ---
Health Index So-So 0.7 --- 2.2 --- 2.3 --- 0.3 --- 2.1 --- -0.4 --- 2.2 --- 2.3 --- 1.1 --- 0.0 --- -1.7 --- 0.9 ---
Three Big Cycles
Economic/Financial Position Reliable 0.3 -0.6 -0.5 --- -0.5 -0.4 1.1 -1.1 -1.1 1.5 --- 0.1 0.1 -0.7
Debt Burden Reliable 0.2 -0.3 0.2 -0.3 0.0 0.7 -0.5 -0.9 1.7 --- 0.4 0.2 -0.8
Expected Growth Reliable 0.3 -0.7 -1.0 --- -0.5 -0.7 0.9 -1.3 -1.0 0.5 --- -0.2 -0.1 -0.4
Internal Order So-So --- --- --- --- --- --- --- --- --- --- --- --- 0.8 --- --- --- --- --- --- 0.3 --- --- --- --- --- --- --- --- --- --- --- ---
Wealth/Values Gap So-So -1.1 0.5 -0.5 -1.8 0.7 0.6 0.5 0.6 -2.9 -2.4 -2.7 0.6
Internal Conflict¹ Reliable --- --- --- --- --- --- --- --- --- --- --- --- 0.9 --- --- --- --- --- --- -0.1 --- --- --- --- --- --- --- --- --- --- --- ---
External Order² So-So --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

1
We are still working to expand our internal and external conflict determinants across all countries.
2
External order based on external conflict gauge vs the global hegemon (USA) or rising power (CHN) as of Jan 2024.
3
We did not give individual European countries reserve status scores.

5
 THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Per Capita Readings Across Major Powers (Score, 5yr and 20yr Change)
PER CAPITA READING ACROSS MAJOR POWER (SCORE, 3YR AND 20YR CHANGE)
Chg: Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y
Gauge
United States China Eurozone Germany Japan Korea India United Kingdom France Russia Singapore Australia
Quality
Strength Gauge (0-1) 0.71 0.30 0.43 0.54 0.40 0.54 0.07 0.46 0.45 0.28 0.89 0.56
Key Eight Measures of Power (0-1)
Education Reliable 96% 56% 80% 82% 82% 89% 5% 89% 81% 61% 71% 89%
Innovation and Technology Reliable 70% 54% 43% 60% 55% 70% 16% 43% 47% 24% 59% 51%
Competitiveness Reliable 42% 56% 46% 57% 68% 81% 66% 50% 28% 78% 86% 47%
Military Reliable 84% 6% 25% 21% 11% 56% 1% 26% 34% 41% 92% 37%
Trade Reliable 32% 8% 37% 100% 29% 59% 0% 58% 59% 14% 100% 31%
Economic Output Reliable 61% 16% 45% 52% 40% 42% 6% 44% 43% 26% 100% 48%
Financial Center Reliable 100% 39% 34% 36% 49% 29% 5% 39% 45% 1% 39% 47%
Reserve Currency Status³ Reliable 83% 1% 33% --- --- --- 23% 1% 0% 41% --- --- --- 0% 7% --- 37%
Growth Per Worker Estimate Reliable 1.2% 4.3% 0.9% 0.6% 1.9% 3.0% 5.3% 0.9% 1.0% 3.1% --- 2.8% 1.5%
Productivity (income adjusted) Reliable -0.2 2.3 -1.2 -1.0 0.4 0.9 4.5 -0.5 -1.2 1.2 1.4 -0.6
What You Pay vs. What You Get Reliable -0.5 1.6 -0.8 -1.0 0.1 0.2 3.5 -0.6 -0.8 1.4 0.2 -0.5
Education Reliable -0.2 1.5 -0.9 -0.9 0.8 1.1 1.6 0.0 -1.4 1.4 0.9 -0.3
Labor Productivity Reliable -0.2 1.2 0.1 0.1 0.7 1.0 1.5 0.1 -0.2 1.4 --- 1.0 -0.2
Working Hard Reliable -1.6 0.2 -2.0 -2.2 -1.3 -1.3 2.2 -1.5 -1.9 -0.3 -0.9 -1.6
Investing Reliable -0.6 1.6 -0.6 -0.7 0.0 -0.1 3.6 -0.9 -0.5 0.5 --- -0.2 -0.5
Culture Reliable 0.6 1.4 -0.6 0.0 0.5 1.3 2.0 0.2 -0.8 -0.2 2.2 -0.2
Corruption Reliable -0.7 0.9 0.0 0.6 1.1 -0.8 3.8 0.6 0.1 -0.9 0.8 0.1
Bureaucracy Reliable 1.4 3.0 0.5 1.3 1.6 1.3 3.9 1.9 0.7 1.8 3.0 0.9
Rule of Law Reliable 0.5 1.4 -0.2 0.2 1.2 0.9 1.8 1.1 0.4 -0.3 2.4 0.6
Savoring Life vs. Achieving Reliable 0.6 0.7 -1.6 -1.2 -0.5 0.3 0.9 -1.4 -2.5 -0.8 2.1 -0.7
Innovation Reliable 2.1 2.0 0.2 1.5 1.1 6.0 1.2 0.7 0.0 -0.5 2.3 -1.0
Self Sufficiency Reliable 0.0 0.6 -2.8 -2.3 -1.1 -0.2 0.4 -1.5 -3.6 -0.7 2.5 -1.2
Indebtedness Reliable -1.3 -0.7 -1.1 -1.7 -1.3 -1.0 1.0 -1.9 -1.0 0.5 -0.9 0.0
Wellbeing
Happiness Index Reliable 1.0 --- 1.2 --- 0.9 --- 0.9 --- 0.6 --- -0.2 --- -0.5 --- 1.7 --- 1.0 --- 0.0 --- 0.5 --- 1.3 ---
Health Index So-So 1.3 --- 1.3 --- 2.2 --- 2.1 --- 2.4 --- 2.3 --- -1.4 --- 2.3 --- 2.2 --- 0.0 --- 2.4 --- 2.3 ---
Three Big Cycles
Economic/Financial Position Reliable -1.6 0.1 -0.9 -0.3 -0.9 0.1 1.0 -1.6 -1.1 0.0 --- 0.2 -0.4
Debt Burden Reliable -1.9 -0.2 -0.4 0.8 -0.9 0.6 0.3 -1.9 -1.0 0.0 0.4 -0.4
Expected Growth Reliable -0.6 0.3 -1.0 -1.3 -0.7 -0.5 1.1 -0.7 -0.8 -0.1 --- -0.2 -0.4
Internal Order So-So -1.5 0.4 0.2 0.5 1.3 --- --- --- --- --- --- -0.6 0.4 -1.8 --- --- --- --- --- ---
Wealth/Values Gap So-So -1.8 0.4 0.0 0.5 0.9 0.7 0.0 -0.1 0.8 -2.0 -2.1 0.6
Internal Conflict¹ Reliable -1.1 0.4 0.3 0.5 1.7 --- --- --- --- --- --- -1.1 0.0 -1.6 --- --- --- --- --- ---
External Order² So-So -1.0 -1.0 0.2 --- --- --- 0.3 --- --- --- --- --- --- 0.3 --- --- --- -1.2 --- --- --- --- --- ---

Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y Δ 3y Δ 20y
Gauge
Turkey Canada Switzerland Brazil Netherlands Indonesia Italy Spain Saudi Arabia Mexico South Africa Argentina
Quality
Strength Gauge (0-1) 0.28 0.50 0.66 0.14 0.55 0.13 0.31 0.34 0.45 0.15 0.12 0.14
Key Eight Measures of Power (0-1)
Education Reliable 37% 89% 83% 25% 76% 13% 63% 65% 45% 38% 30% 24%
Innovation and Technology Reliable 37% 45% 69% 25% 65% 20% 31% 23% 26% 11% 17% 16%
Competitiveness Reliable 75% 50% 38% 58% 53% 60% 49% 57% 56% 76% 56% 58%
Military Reliable 16% 21% 18% 6% 25% 0% 28% 19% 100% 2% 0% 2%
Trade Reliable 12% 68% 100% 4% 100% 2% 48% 46% 38% 17% 6% 6%
Economic Output Reliable 29% 47% 68% 13% 55% 11% 40% 38% 45% 19% 12% 20%
Financial Center Reliable 0% 52% 84% 2% 50% 0% 28% 31% 5% --- 1% 1% 0%
Reserve Currency Status³ Reliable 0% 28% 9% 0% --- --- --- 0% --- --- --- --- --- --- 1% 0% 0% 0%
Growth Per Worker Estimate Reliable 3.6% 0.9% 0.5% --- 1.6% 1.4% 4.8% 0.6% 1.0% 3.0% --- 1.7% 1.9% 1.2%
Productivity (income adjusted) Reliable 1.7 -0.8 -1.2 0.5 -0.7 3.1 -1.8 -1.3 1.2 --- 0.8 1.1 0.4
What You Pay vs. What You Get Reliable 1.7 -0.6 -1.6 1.1 -1.0 2.4 -0.7 -0.5 0.8 --- 1.1 1.3 0.9
Education Reliable 1.1 0.1 -2.1 1.3 -1.5 1.5 -0.3 -0.1 0.7 --- 1.3 --- --- --- 1.2
Labor Productivity Reliable 1.6 0.2 -1.6 1.3 -0.2 1.4 0.3 0.5 1.3 --- 1.3 1.4 1.2
Working Hard Reliable -0.6 -1.6 -2.0 -0.8 -2.0 1.2 -2.0 -1.9 0.0 --- 0.4 -0.7 --- 0.1
Investing Reliable 0.9 -0.9 -0.8 1.0 -0.6 2.6 -0.5 -0.4 0.3 0.0 1.4 0.0
Culture Reliable 0.1 -0.3 0.7 -1.2 0.5 1.3 -2.2 -1.4 0.7 -0.5 -0.3 -1.0
Corruption Reliable 0.3 0.2 0.1 -0.5 0.9 1.8 -1.5 -0.8 0.1 -1.3 0.5 0.0
Bureaucracy Reliable 1.9 1.1 0.9 -1.5 1.1 2.5 -1.2 -0.1 2.4 0.6 1.3 -0.1
Rule of Law Reliable 0.7 0.4 0.0 -0.6 0.2 1.1 -2.1 0.1 1.6 -0.5 1.5 -0.7
Savoring Life vs. Achieving Reliable -1.0 -0.9 -1.3 -2.2 -1.5 0.5 -2.0 -1.5 2.0 --- 0.4 -1.5 --- -1.7
Innovation Reliable 0.0 -1.4 4.5 -0.4 3.8 1.0 -2.6 -2.8 -3.4 -3.5 -1.7 -2.1
Self Sufficiency Reliable -1.4 -1.1 -0.2 -2.2 -1.5 0.9 -3.8 -3.3 1.6 1.2 -2.0 --- -1.2
Indebtedness Reliable -0.3 -0.8 -1.0 --- -0.2 -0.9 1.6 -0.8 -0.7 0.8 --- 0.3 0.4 -1.0
Wellbeing
Happiness Index Reliable -0.1 --- 1.2 --- 1.3 --- 1.1 --- 1.5 --- 1.6 --- 0.8 --- 0.8 --- 0.5 --- 1.4 --- 0.1 --- 0.9 ---
Health Index So-So 0.7 --- 2.2 --- 2.3 --- 0.3 --- 2.1 --- -0.4 --- 2.2 --- 2.3 --- 1.1 --- 0.0 --- -1.7 --- 0.9 ---
Three Big Cycles
Economic/Financial Position Reliable 0.3 -0.6 -0.5 --- -0.5 -0.4 1.1 -1.1 -1.1 1.5 --- 0.1 0.1 -0.7
Debt Burden Reliable 0.2 -0.3 0.2 -0.3 0.0 0.7 -0.5 -0.9 1.7 --- 0.4 0.2 -0.8
Expected Growth Reliable 0.3 -0.7 -1.0 --- -0.5 -0.7 0.9 -1.3 -1.0 0.5 --- -0.2 -0.1 -0.4
Internal Order So-So --- --- --- --- --- --- --- --- --- --- --- --- 0.8 --- --- --- --- --- --- 0.3 --- --- --- --- --- --- --- --- --- --- --- ---
Wealth/Values Gap So-So -1.1 0.5 -0.5 -1.8 0.7 0.6 0.5 0.6 -2.9 -2.4 -2.7 0.6
Internal Conflict¹ Reliable --- --- --- --- --- --- --- --- --- --- --- --- 0.9 --- --- --- --- --- --- -0.1 --- --- --- --- --- --- --- --- --- --- --- ---
External Order² So-So --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Productivity (income adjusted), Culture, Wellbeing, and Three Big Cycles are inherently per capita concepts and are unchanged from the previous exhibit.

1
We are still working to expand our internal and external conflict determinants across all countries.
2
External order based on external conflict gauge vs the global hegemon (USA) or rising power (CHN) as of Jan 2024.
3
We did not give individual European countries reserve status scores.

6
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PART 2: THE MOST IMPORTANT

FACTS AND CHARTS

T
here is an enormous amount of information in this study that allows you to go from granular pictures
within each country up to an aggregate picture of each country and the relationships between countries.
My aspiration is to put the whole dynamic thing online to allow for open-source exploration and con-
tributions to what’s here, but for various reasons I won’t digress into I can’t do that now. That leaves me
with the challenge of trying to show you the highlights. To do that well, I will summarize the biggest forces and
most important pictures as I see them.
To reiterate, my study of history has shown me that there are five big, interrelated influences that are driving
the changing world order and that they tend to evolve in big cycles. In order of most concerning over the near
term, they are:

1. how well the internal order (system) works within countries, especially the United States, to influence
how well people within them work together,

2. how well the world order (system) works to influence how well countries work with one another,

3. how well the debt/money/economic system works,

4. the force of nature, and

5. how well humankind invents and decides to use new and better approaches and technologies.

How these five forces work and interact with each other shapes what happens. In this study, I look at these
forces through hundreds of individual indicators to build up a picture for the world and across each major coun-
try. Before getting into the detailed assessment of each country, I will lay out how I’m seeing the big forces
and how they’ve shifted in recent years.

1. I put the level of internal order first because it appears to be the biggest immediate risk. A few
countries, most importantly the US, are experiencing classic big internal conflicts over wealth,
values, and power, and those conflicts are increasing. The chart below shows the US internal order
gauge, which shows the highest level of internal conflict since the beginning of our data series in 1900.
It appears that this will be the greatest near-term risk, which will come to a head over the next year
with and after the election. For that reason, in a year from now we will know a lot more about how dis-
ruptive this risk will be.

7
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

USA INTERNAL ORDER GAUGE

Up = Riskier Internal Conflict + Wealth/Values Gaps
1.75
1.50

1.25
1.00

0.75
0.50

0.25
0.00
1900 1920 1940 1960 1980 2000 2020

2. The international great power conflict risk appears to be the second greatest risk so I put it second.
My measures show that the United States and China continue to be the two most powerful coun-
tries with high levels of conflict between them. As shown in the chart to the left, the United States
is measured as a bit stronger with China rising fast, and the chart on the right shows that the conflict
between them is the highest on record.

COUNTRY STRENGTH
OVER TIME
(Indexed to Empire Peak) USA - CHN
China United States CONFLICT GAUGE
1.1
100%
0.9
80%
0.7

60%
0.5

40% 0.3

0.1
20% 0.0
-0.1
1850 1900 1950 2000 1960 1980 2000 2020

There are notable differences in the ways they are strong:

a. The United States has much bigger and more developed capital markets than any other country, the
leading reserve currency, the strongest military, and the highest aggregate education rating because
of its excellent universities. It is also the most innovative country and has the largest economy in the
world. It also has large wealth gaps, high domestic conflict risks (shown below), high external conflict
risks, and an unfavorable economic/financial position (high debts and low expected growth).

b. China has relatively high projected growth (we project 4.0% over the next 10 years compared to the
US’s 1.4%), the second largest economy, which is nearly as strong as the US economy, a nearly compa-
rable military in Asia though it is much weaker globally, the highest rating on infrastructure, and it is

8
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

the largest exporter and trading partner of more countries than any other country and is excellent on
innovation and education. China’s main weaknesses are its relatively high risk of external conflict and
high debt levels (netting high corporate and local government debts against low household debts and a
favorable international investment position).

The US-China conflict is only a part of the growing world conflict that is reflected in the sides lining
up in allied and axis powers. The next chart shows our global conflict gauge. It includes all countries and
goes back to 1825. As shown, it is at moderately high levels versus history, comparable to the highest levels
outside of World Wars I and II. It reflects both a high death toll and the flow of refugees from ongoing
conflicts in Ukraine and Gaza, and increased military spending.

GLOBAL CONFLICT GAUGE (Z-SCORE)

3

-1

-2

-3
1825 1850 1875 1900 1925 1950 1975 2000 2025

3. In terms of the debt/money/economic force, all major governments are today more indebted than
at any time since the end of World War II, with large deficits and projected debt increases ahead, and
central banks holding the greatest amount of government debt since World War II, due to inadequate
private sector demand for government debt. See the chart on the left for debt levels. See the chart in
the middle for projected budget deficits. Thus far, much of the debt has been absorbed by the central
banks of each country (see chart on the right), with significant increases following the global financial
crisis and the COVID crash.

CENTRAL CENTRAL BANK GOVT

TOTAL DEBT GOVERNMENT BOND HOLDINGS
TO GDP BUDGET DEFICITS (%GDP)
USA JPN GBR (%GDP) USA GBR
EUR CHN 2000 2030 IMF Estimate DEU JPN (lhs)
4% 120% 50%
450%
2% 40%
0%
350% 80% 30%
-2%
20%
250% -4%
40% 10%
-6%
150%
-8% 0%

50% -10% 0% -10%

00 40 80 20 USA EUR JPN GBR CHN 00 30 60 90 20

9
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

As for economic growth prospects, based on my leading indicators India is projected to see the strongest
real growth over the next 10 years (about 6%), reflecting modest workforce growth (0.7-0.9%), competitive
labor, high rates of investment, and favorable culture, with Indonesia, Turkey, China, and Saudi Arabia
following as the fastest growing of the major economies. The chart below shows my projected growth rates
for these 24 countries. These estimates are based on the leading measures of growth shown in this report.

PROJECTED FUTURE REAL GROWTH ESTIMATE

7%
6%
5%
4%
3%
2%
1%
0%
-1%
IND
IDR
SAR
TUR
CHN
SAF
RUS
SGP
MEX
AUS
ARG
KOR
BRZ
USA
GBR
NLD
JPN
CAN
FRA
ESP
CHE
DEU
ITA
AVG
4. Regarding the forces of nature (droughts, floods, and pandemics), clearly conditions are worsening.
The world faces a rising trend of average temperatures and more natural disasters arising from them.

GLOBAL AVERAGE GLOBAL NUMBER OF NATURAL

TEMPERATURE CATASTROPHIC EVENTS
(10YR MA, CELCIUS) (E.G., FLOODS, STORMS, WILDFIRES)
14.8
200
14.6

14.4 150

14.2
100
14.0
50
13.8

13.6 0
1945 1960 1975 1990 2005 2020 1945 1960 1975 1990 2005 2020

10
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

5. As for the fifth force, inventiveness (especially of technological advancements to raise productiv-
ity and living standards) is the greatest force of humanity. Revolutionary new technologies like AI
have the potential to greatly raise understanding and productivity in virtually every activity or damage
humankind if not handled well. My measure of that force of innovation is shown in the chart below.
As shown and as one can clearly see in developments such as AI, it is accelerating.

WORLD OVERALL INNOVATION INDEX

20

15

10

0
1960 1970 1980 1990 2000 2010 2020

The charts below show where these innovations are happening, both on a total country basis (on the left) and on
a per capita basis (on the right). As shown, while the United States and China dominate, several countries matter.

2024 INNOVATION 2024 INNOVATION

& TECHNOLOGY SCORES & TECHNOLOGY SCORES
(TOTAL) (PER CAPITA)
2.5 3.0
2.0 2.5
2.0
1.5 1.5
1.0 1.0
0.5
0.5
0.0
0.0 -0.5
-0.5 -1.0
-1.5
-1.0
-2.0
-1.5 -2.5
USA
CHN
KOR
EUR
JPN
DEU
GBR
CHE
FRA
NLD
SGP
AUS
CAN
RUS
ITA
TUR
ESP
BRZ
IND
ARG
IDR
SAR
SAF
MEX
AVG

KOR
CHE
USA
NLD
SGP
GBR
DEU
JPN
FRA
CHN
AUS
EUR
CAN
ITA
TUR
ESP
RUS
BRZ
ARG
IDR
SAR
SAF
IND
MEX
AVG

11
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE HEALTH AND HAPPINESS SCORES

My health scores are shown below for all 24 major countries. As shown, most of the developed countries
except the United States have similar health scores (e.g., most have life expectancies of 83-85 years). The
United States (with an average life expectancy of 78) falls off, and other countries have significantly worse
scores. Singapore, Japan, Switzerland, Spain, and Korea score highest on my measure of average health,
which considers factors including life expectancy, exposure to pollution, and homicide rates. Notably, China is
now about as healthy as the US, having closed the gap in the last decade.

HEALTH SCORE
3

-1

-2
SGP
JPN
CHE
ESP
KOR
GBR
AUS
ITA
CAN
FRA
EUR
NLD
DEU
USA
CHN
SAR
ARG
TUR
BRZ
RUS
MEX
IDR
IND
SAF
AVG
The happiness readings are shown below for all 24 major countries. The UK, Indonesia, Netherlands,
Mexico, and Switzerland score highest on happiness, which includes measures like surveyed happiness and
low suicide rates. China rates as happier than the US.

HAPPINESS SCORE
2

-1
GBR
IDR
NLD
MEX
CHE
AUS
CAN
CHN
BRZ
USA
FRA
ARG
EUR
DEU
ITA
ESP
JPN
SAR
SGP
SAF
RUS
TUR
KOR
IND
AVG

12
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PART 3: COUNTRY SUMMARIES

W
hat follows in Part 3 are brief reports on each of the 24 countries. These pages were created by
“autotext,” which is a computer-generated analysis. The information was reviewed to quality
control it.

13
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF THE UNITED STATES

This is our computer generated reading for the United States as of July 2024.

Based on the latest readings of key indicators, the United States appears to be a strong power (#1 among major countries
today) in gradual decline. As shown in the table below, the key strengths of the United States that put it in this position are
its strong capital markets and financial center, its strong military, its high level of education, its reserve currency status, its
innovation/technology, its high economic output, its importance to global trade, its effective allocation of labor and capital,
and its wealth of natural resources. Its weaknesses are its unfavorable economic/financial position and its large domestic
conflicts. The eight major measures of power are very strong today but have, in aggregate, fallen slowly over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For the United States, the big cycles look mostly unfavorable.

The United States is in an unfavorable position in its economic and financial cycles, with a high debt burden and relatively
low expected real growth over the next 10 years (1.4% per year). In the last 3 years, real growth has been 3.1% per year, above
our longer-term expectations. Over the same time, the stock market in the United States has returned 20.6% above cash, out-
performing the rest of the world (17.1%). Debt levels are high (265% of GDP across non-financial sectors). Breaking this down,
government debt levels are high (123% of GDP); household debt levels are modest (67% of GDP); and non-financial corporate
debt levels are modest (75% of GDP). The bulk (99%) of these debts are in its own currency, which mitigates its debt risks. The
United States has significantly more foreign debts than foreign assets (net international investment position is -72% of GDP).
The ability to use interest rate cuts to stimulate the economy is high (short rates at 5.4%). That said, being the world's leading
reserve currency is a large benefit to the US. If this were to change, it would significantly weaken the US position.

Internal disorder is a high risk. Wealth, income and values gaps are large (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in the United States capture 20% and 47% of income (respectively the
6th and 8th highest share across major countries) and 35% and 71% of wealth (respectively the 7th and 6th highest share across
major countries). Over the last decade, incomes for the top 10% grew 25% while incomes for the bottom 60% grew 30%. The
relatively high income growth for the bottom 60% reduces the risks from inequality. Our internal conflict gauge is high and get-
ting worse. This gauge measures actual conflict events (i.e., protests), political conflict (i.e., partisanship), and general discontent
(based on surveys).

External disorder is a risk. Most importantly, the United States and China, which is fast-rising and the #2 power (all things
considered), are having significant conflict. One example of this is that 83% of Americans today have an unfavorable view of
China (up from 45% in 2018).

Looking in more detail at the eight key measures of power—the United States has the largest capital markets and the stron-
gest financial center among major countries. Its equity markets are a majority of the world total (64% of free-float market
cap and 73% of volume), and a majority of global transactions happen in USD (62%). In addition, the United States has the
strongest military among major countries. A large share (40%) of global military spending is by the United States, and it has a
moderate share (7%) of the world’s military personnel. The United States also has the strongest position in education among
major countries. The United States has a large share of the world’s bachelor’s degrees (16%) and a large share of the world’s doc-
torate degrees (26%). On years of education, the United States is good—students have on average 14.1 years of education vs 11.7
in the average major country. PISA scores, which measure the proficiency of 15-year-old students across countries, are around
average—489 vs 479 in the average major country. On technology, 73.6% of the world’s technology companies by value are listed
in the United States while it comprises only 50.3% of the total global equity market cap. The United States also has a mix of other
strengths, detailed in the table below.

14
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Finally, we also assess broader well-being by looking at measures of happiness and health/safety. The United States scores mod-
estly high on our happiness index (1.0z, which measures survey responses like the share of people that reported being happy in
the country and other indications of societal satisfaction like low suicide rates) and scores modestly high on our health index
(1.3z, which measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For exam-
ple, the life expectancy at birth (in years) in the United States is 78 compared to a global average of 75.

UNITED STATES—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.89 Rank: 1 Getting Worse Getting Worse

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Unfavorable -1.6 24 Getting Worse Flat

Debt Burden High Debt -1.9 24 Getting Worse Getting Worse

Expected Growth 1.4% -0.6 14 Getting Worse Flat

Internal Order High Risk -1.5 9 Getting Worse Getting Better

Wealth/Values Gap Large -1.8 19 Getting Worse Getting Worse

Internal Conflict High -1.1 8 Getting Worse Getting Better

External Order At Risk -1.0 - Getting Worse Getting Worse

Key Eight Measures of Power

Financial Center Very Strong 2.7 1 Flat Getting Better

Military Very Strong 2.1 1 Flat Flat

Education Very Strong 2.0 1 Getting Worse Getting Worse

Reserve Currency Status Very Strong 1.9 1 Flat Flat

Innovation and Technology Very Strong 1.9 1 Flat Flat

Economic Output Strong 1.7 1 Flat Flat

Trade Strong 1.3 2 Flat Getting Better

Competitiveness Average -0.4 14 Flat Getting Worse

Additional Measures of Power

Infrastructure & Investment Strong 0.9 2 Getting Worse Getting Worse

Resource Allocation Efficiency Very Strong 2.0 4 Flat Getting Better

Geology Strong 1.6 4 Flat Flat

Character/Determination/Civility Strong 1.1 7 Flat Flat

Governance/Rule of Law Strong 0.7 7 Flat Flat

Acts of Nature Average -0.2 14 - Getting Worse

Wellbeing

Happiness Gauge Moderate 1.0 10 - Flat

Health Gauge Good 1.3 14 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for the United States.

This computer-generated report is our best attempt to synthesize conditions in the United States. If
anything sounds off, we’d love your comments.

15
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE UNITED STATES’ PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that the United States’s real growth rate over the next 10 years will be in the
vicinity of 1.4%. This growth rate is somewhat below the global average, ranked 22nd out of 35 major economies, and 4th out of
17 developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statis-
tics detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity
or political shocks, natural disasters, or wars).

In the United States’s case, our growth estimate comes from combining our expectation of a 1.2% growth rate per worker, which
is somewhat below the global average, and a labor force growth rate of 0.2%, which will moderately boost growth. The growth in
output per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while
swings in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect the United States’s productivity growth to be about average compared to most major countries
(implying a growth rate of 1.6% on its own), and indebtedness conditions to be slightly worse than other countries (implying
a growth rate of 0.4% on its own). As shown below, the United States’s biggest relative strengths are its level of innovation/
commercialism and its level of bureaucracy, and its biggest relative problems are its debt and debt service levels and its monetary
policy. The various gauges and weights are shown below. The individual indicators that are behind them are explained in the
appendix of this study. Please review this table to understand our comments.

UNITED STATES—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.4% 22

Working-Age Population Growth 0.2% 15

Growth Per Worker Estimate 1.2% 24

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 20

What You Pay vs. What You Get 45% 24

Education 11% 25

Labor Productivity 11% 31

Working Hard 11% 26

Investing 11% 28

Culture 20% 10

Corruption 3% 28

Bureaucracy 3% 13

Rule of Law 3% 17

Savoring Life vs. Achieving 3% 6

Innovation 3% 6

Self Sufficiency 3% 8

Indebtedness 35% 33

Debt Levels and Flow 18% 25

Monetary Policy 18% 29

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

16
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the United States

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as “what you pay versus what you get”; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

The United States offers somewhat worse than average value, ranked 24th of 35 countries we measure. Its workers are neither
expensive nor inexpensive, weighing the United States’s high levels of education (according to tertiary education rates) and about
average quality of education (according to PISA test scores). Further, people in the United States don’t work long hours relative
to the cost of their labor—the average person of working age works 22.4 hours per week (15th out of 35 countries, and 22nd out
of 35 countries after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected
10-year change in the dependency ratio). Levels of saving and investing are somewhat low given the United States’s very high
per capita income levels, with investment at about 18% of GDP (22nd out of 35 countries). The United States’s capital stock per
capita (its structures, machinery, transportation equipment, software and intellectual property) is growing at a rate of 2.4% per
year (vs. an average of +1% across the developed world). Investment in the United States is more productive than investment in
other countries with similar levels of economic development, ranked 3rd out of 17 developed countries (measuring productivity
as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

US culture appears to be a somewhat better than average contributor to growth in coming years, ranked 10th among the coun-
tries we measure. Note that our culture measures compare the United States to countries of similar levels of economic devel-
opment. Starting with self-sufficiency, the United States is rated pretty well on this measure, weighing that its workers have a
somewhat weak work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of
government support is neutral (with government outlays of 40% of GDP and transfer payments to households of 22% of GDP),
and its labor markets are very flexible. The United States also seems to value achieving a bit more than savoring —again, its work
ethic is somewhat weak, but surveys suggest that its people highly value accomplishment and achievement. Furthermore, inno-
vation and commercialism are somewhat strong in the United States relative to income. We see the country investing heavily in
research and innovation, and its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its
income, the United States has somewhat low bureaucracy and red tape, somewhat high corruption, and somewhat strong rule of
law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
The United States’s indebtedness position is worse than other countries, ranked 33rd out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 337% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally a bit tight.

17
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF CHINA

This is our computer generated reading for China as of July 2024.

Based on the latest readings of key indicators, China appears to be a strong power (#2 among major countries today) in rapid
ascent although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strengths of China that
put it in this position are its infrastructure and investment, its importance to global trade, its innovation/technology, its
high level of education, its high economic output, its people’s self-sufficiency and strong work ethic, and its strong military.
The eight major measures of power are somewhat strong today and have, in aggregate, risen rapidly over the last 20 years. In
particular, relative to its standing in the world 20 years ago, China’s innovation and technology, its relative position in education,
and its importance to global trade are strengthening. However, China’s relative power over the last 3 years has been flat, most
notably its status as a financial center declined and its importance to global trade and its reserve currency status are flat.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For China, the big cycles look somewhat favorable in level terms though the economic and financial position has deterio-
rated over the last three years.

China is in a somewhat favorable position in its economic and financial cycles, with a moderately high debt burden and
moderate expected real growth over the next 10 years (4.0% per year). In the last 3 years, real growth has been 4.3% per year,
around our longer-term expectations. Over the same time, the stock market in China has returned -41.8% below cash, meaning-
fully underperforming the rest of the world (17.1%). Debt levels are high (281% of GDP across non-financial sectors). Breaking
this down, central government debt levels are low (24% of GDP); local government debt levels are modest (57% of GDP); house-
hold debt levels are low (45% of GDP); and non-financial corporate debt levels (including local government financing vehicles)
are high (155% of GDP). The bulk (98%) of these debts are in its own currency, which mitigates its debt risks. China has slightly
more foreign assets than foreign debts (net international investment position is 16% of GDP). The ability to use interest rate cuts
to stimulate the economy is low (short rates at 1.4%).

Internal disorder is a low risk as far as we can tell. However, our read of internal order is muddied by the fact that people
have limited freedom of speech and ability to express their oppositions relative to most other countries. Wealth, income and
values gaps are typical (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10%
in China capture 15% and 43% of income (respectively the 10th and 12th highest share across major countries) and 32% and 68%
of wealth (respectively the 9th and 7th highest share across major countries). Over the last decade, incomes for the top 10% grew
70% while incomes for the bottom 60% grew 84%. The relatively high income growth for the bottom 60% reduces the risks from
inequality. Our internal conflict gauge is average (low conf. read) and getting better. This gauge measures actual conflict events
(i.e., protests), political conflict (i.e., partisanship), and general discontent (based on surveys).

External disorder is a risk. Most importantly, China and the United States, which is declining but remains the #1 power (all
things considered), are having significant conflict. One example of this is that 83% of Americans today have an unfavorable view
of China (up from 45% in 2018).

Looking in more detail at the eight key measures of power—China is the largest exporter among major countries. It exports
14% of global exports. In addition, China has the second strongest reading on our measures of technology and innovation
among major countries. A majority (61%) of global patent applications, a large share (24%) of global R&D spending and a large
share (24%) of global researchers are in China. China also has the second strongest position in education among major coun-
tries. China has a large share of the world’s bachelor’s degrees (16%) and a large share of the world’s doctorate degrees (25%).
These strengths in technology and education mean China is the most credible competition to the US in developing large-scale
new technologies. China also has a mix of other strengths, detailed in the table below.

18
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. China scores modestly high on
our happiness index (1.2z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores modestly high on our health index (1.3z, which
measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life
expectancy at birth (in years) in China is 79 compared to a global average of 75.

CHINA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.80 Rank: 2 Getting Better Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.1 8 Getting Worse Getting Worse

Debt Burden Moderately High Debt -0.2 13 Getting Worse Getting Worse

Expected Growth 4.0% 0.3 5 Getting Worse Getting Worse

Internal Order Low Risk 0.4 5 Flat Getting Better

Wealth/Values Gap Typical 0.4 12 Flat Flat

Internal Conflict Average (low conf. read) 0.4 4 Getting Better Getting Better

External Order At Risk -1.0 - Getting Worse Getting Worse

Key Eight Measures of Power

Trade Very Strong 1.7 1 Getting Better Flat

Innovation and Technology Very Strong 1.8 2 Getting Better Getting Better

Education Strong 1.6 2 Getting Better Getting Better

Economic Output Strong 1.6 2 Getting Better Getting Better

Military Strong 0.9 2 Getting Better Flat

Financial Center Average 0.2 3 Getting Better Getting Worse

Competitiveness Strong 1.0 4 Getting Worse Flat

Reserve Currency Status Weak -0.6 6 Flat Flat

Additional Measures of Power

Infrastructure & Investment Very Strong 2.5 1 Getting Better Getting Better

Resource Allocation Efficiency Strong 0.7 1 Flat Getting Worse

Character/Determination/Civility Strong 1.4 6 Flat Flat

Geology Strong 0.6 6 Flat Flat

Governance/Rule of Law Average -0.4 13 Getting Better Getting Better

Acts of Nature Average 0.0 10 - Getting Better

Wellbeing

Happiness Gauge Good 1.2 8 - Getting Better

Health Gauge Good 1.3 15 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for China.

This computer-generated report is our best attempt to synthesize conditions in China. If anything
sounds off, we’d love your comments.

19
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CHINA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that China’s real growth rate over the next 10 years will be in the vicinity of
4.0%. This growth rate is well above the global average, ranked 6th out of 35 major economies, and 6th out of 18 emerging coun-
tries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the
Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks,
natural disasters, or wars).

In China’s case, our growth estimate comes from combining our expectation of a 4.3% growth rate per worker, which is well
above the global average, and a labor force growth rate of -0.4%, which will moderately weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect China’s productivity growth to be much better than most major countries (implying a growth
rate of 5.0% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of 3.1%
on its own). As shown below, China’s biggest relative strengths are its levels of investment and the value its workers provide rel-
ative to education levels, and its biggest relative problems are its debt and debt service levels and its monetary policy. The various
gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study.
Please review this table to understand our comments.

CHINA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 4.0% 6

Working-Age Population Growth -0.4% 25

Growth Per Worker Estimate 4.3% 4

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 3

What You Pay vs. What You Get 45% 5

Education 11% 3

Labor Productivity 11% 16

Working Hard 11% 4

Investing 11% 3

Culture 20% 4

Corruption 3% 7

Bureaucracy 3% 4

Rule of Law 3% 7

Savoring Life vs. Achieving 3% 5

Innovation 3% 7

Self Sufficiency 3% 6

Indebtedness 35% 18

Debt Levels and Flow 18% 21

Monetary Policy 18% 15

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

20
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on China

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

China offers much better than average value, ranked 5th of 35 countries we measure. Its workers are somewhat inexpensive,
weighing China’s low levels of education (according to tertiary education rates) and very good quality of education (according to
PISA test scores). Further, people in China work very long hours relative to the cost of their labor—the average person of work-
ing age works 30.9 hours per week (7th out of 35 countries, and 5th out of 35 countries after adjusting for income), although the
demographics of the workforce are about average (according to the projected 10-year change in the dependency ratio). Levels of
saving and investing are high given China’s low per capita income levels, with investment at about 32% of GDP (1st out of 35
countries). China’s capital stock per capita (its structures, machinery, transportation equipment, software and intellectual prop-
erty) is growing at a relatively fast rate of 6.9% per year (vs. an average of +1% across the emerging world). Investment in China
is less productive as investment in other countries with similar levels of economic development, ranked 16th out of 18 emerging
countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Chinese culture appears to be a significant contributor to growth in coming years, ranked 4th among the countries we measure.
Note that our culture measures compare China to countries of similar levels of economic development. Starting with self-suf-
ficiency, China is rated pretty well on this measure, weighing that its workers have a roughly average work ethic (considering
a variety of indicators including hours worked, retirement age, and vacations), its level of government support is neutral (with
government outlays of 34% of GDP and transfer payments to households of 8% of GDP), and its labor markets are very flexible.
China also seems to value savoring about the same as it values achieving—again, its work ethic is roughly average, but surveys
suggest that its people value accomplishment and achievement. Furthermore, innovation and commercialism are somewhat
strong in China relative to income. We see the country investing heavily in research and innovation, and its outputs from inno-
vation, including inventions and earnings, are very high. Finally, relative to its income, China has very low bureaucracy and red
tape, somewhat low corruption, and somewhat strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
China’s indebtedness position is about average compared to other countries, ranked 18th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 297% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
supported by high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally
a bit tight.

21
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF EUROZONE

This is our computer generated reading for Eurozone as of July 2024.

Based on the latest readings of key indicators, Eurozone appears to be a strong power (#3 among major countries today) in
gradual decline, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strengths
of Eurozone are its strong capital markets and financial center, its reserve currency status, its importance to global trade,
its high economic output, its infrastructure and investment, and its high level of education. Its weaknesses are its people’s
lower than average work ethic and low self-sufficiency, its relative lack of natural resources, and its relatively expensive labor
(on a quality-adjusted basis). The eight major measures of power are somewhat strong today but have, in aggregate, fallen slowly
over the past 20 years. In particular, the Eurozone’s share of global output, its importance as a financial center, and its importance
to global trade are declining.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Eurozone, the big cycles look somewhat unfavorable.

The Eurozone is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt
burden and very low expected real growth over the next 10 years (0.3% per year). In the last 3 years, real growth has been 2.5%
per year, above our longer-term expectations. Over the same time, the stock market in Eurozone has returned 26.2% above cash,
outperforming the rest of the world (17.1%). Debt levels are high (252% of GDP across non-financial sectors). Breaking this
down, government debt levels are high (106% of GDP); household debt levels are modest (53% of GDP); and non-financial cor-
porate debt levels are modest (93% of GDP). The Eurozone has similar levels of foreign debts and foreign assets (net international
investment position is 3% of GDP). The ability to use interest rate cuts to stimulate the economy is modest (short rates at 3.6%).

Internal disorder is a low risk. Wealth, income and values gaps are relatively large (relative to countries of similar per capita
income levels). Regarding inequality—the top 1% and top 10% in the Eurozone capture 12% and 36% of income (both the 16th
highest share across major countries). Over the last decade, incomes for the top 10% grew 11% while incomes for the bottom 60%
grew 13%. The relatively low income growth for the bottom 60% increases the risks from inequality. Our internal conflict gauge
is average. This gauge measures actual conflict events (i.e., protests), political conflict (i.e., partisanship), and general discontent
(based on surveys).

Looking in more detail at the eight key measures of power—the Eurozone has the second largest capital markets and the
second strongest financial center among major countries. Its equity markets are a moderate share of the world total (7% of free-
float market cap and 4% of volume), and a large share of global transactions happen in EUR (18%). In addition, the Eurozone
has the second strongest reserve currency among major countries. A large share of global currency reserves are in EUR (20%),
and a large share of global debt is denominated in EUR (15%). The Eurozone also is a relatively large exporter among major
countries. It exports 12% of global exports. The Eurozone also has a mix of other strengths, detailed in the table below.

We net this against its relatively expensive labor (on a quality-adjusted basis). Adjusted for worker quality, labor is somewhat
more expensive than the global average. On technology, only 4.5% of the world’s technology companies by value are listed in the
Eurozone even though it comprises 8.9% of the total global equity market cap.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Eurozone scores modestly high
on our happiness index (0.9z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.2z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy
at birth (in years) in Eurozone is 83 compared to a global average of 75.

22
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

This page reflects our estimate of the power of the Eurozone in aggregate. For most stats, we’re using an aggregate across
the eight major countries in the Eurozone. You can see how we get to our future growth read by referencing our detailed
estimate pages for each of these countries.

EUROZONE—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.56 Rank: 3 Getting Worse Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.9 18 Flat Flat

Debt Burden Moderately High Debt -0.4 16 Getting Better Getting Better

Expected Growth 0.3% -1.0 21 Flat Getting Worse

Internal Order Low Risk 0.2 7 Getting Better Getting Better

Wealth/Values Gap Relatively Large 0.0 13 Getting Better Getting Better

Internal Conflict Average 0.3 5 Flat Getting Better

External Order - 0.2 - Flat Getting Worse

Key Eight Measures of Power

Financial Center Average 0.4 2 Flat Getting Worse

Reserve Currency Status Average 0.2 2 Flat Getting Worse

Trade Strong 1.2 3 Flat Flat

Economic Output Strong 1.0 3 Getting Worse Getting Worse

Education Average 0.5 3 Flat Flat

Innovation and Technology Average 0.2 4 Flat Flat

Military Average -0.1 6 Flat Flat

Competitiveness Weak -0.6 20 Flat Flat

Additional Measures of Power

Infrastructure & Investment Strong 0.5 3 Flat Flat

Governance/Rule of Law Average -0.5 14 - Flat

Resource Allocation Efficiency Weak -0.8 18 Flat Getting Better

Geology Weak -0.8 22 Flat Getting Worse

Character/Determination/Civility Weak -1.0 22 Flat Flat

Acts of Nature Average 0.1 9 - Getting Worse

Wellbeing

Happiness Gauge Moderate 0.9 13 - Flat

Health Gauge Excellent 2.2 11 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Eurozone.

This computer-generated report is our best attempt to synthesize conditions in the Eurozone. If any-
thing sounds off, we’d love your comments.

23
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF GERMANY

This is our computer generated reading for Germany as of July 2024.

Based on the latest readings of key indicators, Germany appears to be a middle of the pack power (#4 among major countries
today) on a flat trajectory. As shown in the table below, the key strength of Germany is its effective allocation of labor and
capital. Its weaknesses are its relatively expensive labor (on a quality-adjusted basis), its relative lack of natural resources,
and its relatively weak military. The eight major measures of power are somewhat weak today and have, in aggregate, moved
sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Germany, the big cycles look mixed.

Germany is in a moderately unfavorable position in its economic and financial cycles, with a low debt burden but very low
expected real growth over the next 10 years (-0.5% per year). In the last 3 years, real growth has been 0.8% per year, above our
longer-term expectations. Over the same time, the stock market in Germany has returned 12.2% above cash, underperforming
the rest of the world (17.1%). Debt levels are modest (188% of GDP across non-financial sectors). Breaking this down, govern-
ment debt levels are modest (67% of GDP); household debt levels are modest (51% of GDP); and non-financial corporate debt
levels are modest (69% of GDP). Germany’s debts are largely in euros, which increases Germany’s debt risks, since this is not
a currency that Germany directly controls. Germany has significantly more foreign assets than foreign debts (net international
investment position is 69% of GDP). The ability to use interest rate cuts to stimulate the economy is modest for the Eurozone
(short rates are at 3.6%).

Internal disorder is a low risk. Wealth, income and values gaps are typical (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in Germany capture 12% and 37% of income (respectively the 14th and
15th highest share across major countries) and 28% and 59% of wealth (respectively the 13th and 15th highest share across major
countries). Over the last decade, incomes for the top 10% grew 13% while incomes for the bottom 60% grew 10%. The relatively
low income growth for the bottom 60% increases the risks from inequality. Our internal conflict gauge is average. This gauge
measures actual conflict events (i.e., protests), political conflict (i.e., partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power, we would call out its relatively expensive labor (on a quali-
ty-adjusted basis) and its relatively weak military. With labor cost, once we adjust for worker quality, labor is somewhat more
expensive than the global average. A small share (3%) of global military spending is by Germany, and it has a small share (less
than 1%) of the world’s military personnel.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Germany scores modestly high
on our happiness index (0.9z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.1z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy
at birth (in years) in Germany is 81 compared to a global average of 75.

24
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

GERMANY—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.38 Rank: 4 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.3 11 Getting Better Getting Worse

Debt Burden Low Debt 0.8 2 Getting Better Getting Better

Expected Growth -0.5% -1.3 23 Getting Worse Getting Worse

Internal Order Low Risk 0.5 3 Getting Worse Flat

Wealth/Values Gap Typical 0.5 11 Getting Worse Flat

Internal Conflict Average 0.5 3 Flat Getting Worse

External Order - - - - -

Key Eight Measures of Power

Trade Average 0.5 4 Getting Worse Getting Worse

Economic Output Average -0.2 5 Getting Worse Getting Worse

Financial Center Average -0.1 6 Flat Flat

Innovation and Technology Average -0.2 6 Getting Worse Getting Worse

Education Average -0.3 8 Flat Flat

Military Weak -0.7 16 Flat Flat

Competitiveness Weak -0.8 23 Flat Getting Worse

Reserve Currency Status - - - - -

Additional Measures of Power

Resource Allocation Efficiency Strong 0.6 2 Getting Better Flat

Governance/Rule of Law Strong 0.7 8 Flat Flat

Infrastructure & Investment Average -0.4 11 Flat Flat

Character/Determination/Civility Average -0.5 18 Flat Getting Worse

Geology Weak -0.6 18 Flat Getting Better

Acts of Nature Strong 1.2 6 - Getting Better

Wellbeing

Happiness Gauge Moderate 0.9 14 - Flat

Health Gauge Excellent 2.1 13 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Germany.

This computer-generated report is our best attempt to synthesize conditions in Germany. If anything
sounds off, we’d love your comments.

25
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

GERMANY’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Germany’s real growth rate over the next 10 years will be in the vicinity of
-0.5%. This growth rate is well below the global average, ranked 34th out of 35 major economies, and 16th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Germany’s case, our growth estimate comes from combining our expectation of a 0.6% growth rate per worker, which is
well below the global average, and a labor force growth rate of -1.1%, which will weigh on growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Germany’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 1.1% on its own), and indebtedness conditions to be worse than other countries (implying a growth rate of -0.3%
on its own). As shown below, Germany’s biggest relative strengths are its level of innovation/commercialism and its level of
bureaucracy, and its biggest relative problems are its debt and debt service levels and its shrinking workforce. The various gauges
and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please
review this table to understand our comments.

GERMANY—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate -0.5% 34

Working-Age Population Growth -1.1% 33

Growth Per Worker Estimate 0.6% 34

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 29

What You Pay vs. What You Get 45% 33

Education 11% 29

Labor Productivity 11% 27

Working Hard 11% 35

Investing 11% 30

Culture 20% 17

Corruption 3% 11

Bureaucracy 3% 16

Rule of Law 3% 21

Savoring Life vs. Achieving 3% 17

Innovation 3% 8

Self Sufficiency 3% 29

Indebtedness 35% 34

Debt Levels and Flow 18% 27

Monetary Policy 18% 31

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

26
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Germany

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Germany offers much worse than average value, ranked 33rd of 35 countries we measure. Its workers are neither expensive nor
inexpensive, weighing Germany’s low levels of education (according to tertiary education rates) and about average quality of edu-
cation (according to PISA test scores). Further, people in Germany don’t work long hours relative to the cost of their labor—the
average person of working age works 16.7 hours per week (32nd out of 35 countries, and 33rd out of 35 countries after adjusting
for income), and the demographics of the workforce are very unfavorable (according to the projected 10-year change in the depen-
dency ratio). Levels of saving and investing are somewhat low given Germany’s high per capita income levels, with investment at
about 16% of GDP (27th out of 35 countries). Germany’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 0.7% per year (vs. an average of +1% across the developed world).
Investment in Germany is about as productive as investment in other countries with similar levels of economic development,
ranked 14th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

German culture appears to be an around average contributor to growth in coming years, ranked 17th among the countries we
measure. Note that our culture measures compare Germany to countries of similar levels of economic development. Starting
with self-sufficiency, Germany is rated pretty poorly on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is
high (with government outlays of 49% of GDP and transfer payments to households of 26% of GDP), and its labor markets are
moderately flexible. Germany also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, but
surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commercialism
are somewhat strong in Germany relative to income. We see the country investing neither lightly nor heavily in research and
innovation, and its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income,
Germany has somewhat low bureaucracy and red tape, somewhat low corruption, and average rule of law, according to the inter-
national measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Germany’s indebtedness position is worse than other countries, ranked 34th out of the 35 countries we look at. Based on current
debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around 245%
of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither supported
nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally a
bit tight.

27
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF JAPAN

This is our computer generated reading for Japan as of July 2024.

Based on the latest readings of key indicators, Japan appears to be a middle of the pack power (#5 among major countries
today) in decline although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strengths of
Japan are its high internal order, its effective allocation of labor and capital, and its reserve currency status. Its key weakness
is its relative lack of natural resources. The eight major measures of power are mixed today and have, in aggregate, fallen over
the last 20 years. In particular, relative to its standing in the world 20 years ago, Japan’s share of global output, its importance to
global trade, and its innovation and technology are declining. However, Japan’s relative power over the last 3 years has been flat,
most notably its competitiveness improved.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Japan, the big cycles look mixed.

Japan is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden and
relatively low expected real growth over the next 10 years (1.2% per year). In the last 3 years, real growth has been 1.2% per
year, around our longer-term expectations. Over the same time, the stock market in Japan has returned 51.2% above cash, mean-
ingfully outperforming the rest of the world (17.1%). Debt levels are high (403% of GDP across non-financial sectors). Breaking
this down, government debt levels are high (227% of GDP); household debt levels are modest (61% of GDP); and non-financial
corporate debt levels are high (115% of GDP). The bulk (99%) of these debts are in its own currency, which mitigates its debt
risks. Japan has significantly more foreign assets than foreign debts (net international investment position is 82% of GDP). The
ability to use interest rate cuts to stimulate the economy is low (short rates at 0.1%).

Internal disorder is a low risk. Wealth, income and values gaps are narrow (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in Japan capture 13% and 44% of income (respectively the 12th and 11th
highest share across major countries) and 25% and 59% of wealth (both the 17th highest share across major countries). Over the
last decade, incomes for the top 10% grew 3% while incomes for the bottom 60% grew 3%. The relatively low income growth
for the bottom 60% increases the risks from inequality. Our internal conflict gauge is very low and getting better. This gauge
measures actual conflict events (i.e., protests), political conflict (i.e., partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power—Japan has a relatively strong reserve currency. A moderate share
of global currency reserves are in JPY (6%), and a moderately large share of global debt is denominated in JPY (10%).

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Japan scores modestly high on
our happiness index (0.6z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.4z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Japan is 85 compared to a global average of 75.

28
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

JAPAN—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.33 Rank: 5 Getting Worse Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.9 19 Flat Getting Better

Debt Burden Moderately High Debt -0.9 20 Flat Getting Better

Expected Growth 1.2% -0.7 17 Getting Better Getting Better

Internal Order Low Risk 1.3 1 Getting Better Flat

Wealth/Values Gap Narrow 0.9 1 Getting Better Flat

Internal Conflict Very Low 1.7 1 Getting Better Getting Worse

External Order - 0.3 - Flat Getting Worse

Key Eight Measures of Power

Reserve Currency Status Average -0.4 3 Flat Flat

Education Average 0.1 5 Flat Flat

Innovation and Technology Average 0.0 5 Getting Worse Getting Worse

Financial Center Average -0.1 5 Getting Worse Getting Worse

Economic Output Average -0.2 6 Getting Worse Getting Worse

Trade Weak -0.6 7 Getting Worse Getting Worse

Military Average -0.4 9 Flat Flat

Competitiveness Average 0.0 13 Getting Better Getting Better

Additional Measures of Power

Resource Allocation Efficiency Strong 0.6 3 Flat Getting Better

Infrastructure & Investment Average -0.1 5 Getting Worse Flat

Governance/Rule of Law Strong 0.8 6 Flat Flat

Character/Determination/Civility Average 0.2 11 Getting Worse Getting Worse

Geology Weak -0.9 24 Flat Getting Better

Acts of Nature Strong 1.4 3 - Getting Better

Wellbeing

Happiness Gauge Moderate 0.6 17 - Flat

Health Gauge Excellent 2.4 2 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Japan.

This computer-generated report is our best attempt to synthesize conditions in Japan. If anything sounds
off, we’d love your comments.

29
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

JAPAN’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Japan’s real growth rate over the next 10 years will be in the vicinity of 1.2%.
This growth rate is somewhat below the global average, ranked 25th out of 35 major economies, and 7th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Japan’s case, our growth estimate comes from combining our expectation of a 1.9% growth rate per worker, which is roughly
in line with the global average, and a labor force growth rate of -0.8%, which will weigh on growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Japan’s productivity growth to be about average compared to most major countries (implying a
growth rate of 2.6% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of
0.7% on its own). As shown below, Japan’s biggest relative strengths are the value its workers provide relative to education levels
and its level of bureaucracy, and its biggest relative problems are its debt and debt service levels and its shrinking workforce. The
various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this
study. Please review this table to understand our comments.

JAPAN—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.2% 25

Working-Age Population Growth -0.8% 30

Growth Per Worker Estimate 1.9% 15

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 17

What You Pay vs. What You Get 45% 20

Education 11% 17

Labor Productivity 11% 21

Working Hard 11% 19

Investing 11% 15

Culture 20% 11

Corruption 3% 4

Bureaucracy 3% 11

Rule of Law 3% 8

Savoring Life vs. Achieving 3% 10

Innovation 3% 10

Self Sufficiency 3% 15

Indebtedness 35% 32

Debt Levels and Flow 18% 28

Monetary Policy 18% 28

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

30
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Japan

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Japan offers around average value, ranked 20th of 35 countries we measure. Its workers are somewhat inexpensive, especially
taking into consideration Japan’s somewhat high levels of education (according to tertiary education rates) and very good quality
of education (according to PISA test scores). Further, people in Japan work an average number of hours relative to the cost of
their labor—the average person of working age works 21.4 hours per week (19th out of 35 countries, and 20th out of 35 countries
after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in
the dependency ratio). Levels of saving and investing are roughly average given Japan’s high per capita income levels, with invest-
ment at about 21% of GDP (14th out of 35 countries). Japan’s capital stock per capita (its structures, machinery, transportation
equipment, software and intellectual property) is growing at a relatively slow rate of 0.4% per year (vs. an average of +1% across
the developed world). Investment in Japan is more productive than investment in other countries with similar levels of economic
development, ranked 2nd out of 17 developed countries (measuring productivity as incremental growth for each additional dollar
of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Japanese culture appears to be a somewhat better than average contributor to growth in coming years, ranked 11th among the
countries we measure. Note that our culture measures compare Japan to countries of similar levels of economic development.
Starting with self-sufficiency, Japan is rated about average on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is high (with government outlays of 42% of GDP and transfer payments to households of 24% of GDP), and its labor markets
are moderately flexible. Japan also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, but
surveys suggest that its people value accomplishment and achievement. Furthermore, innovation and commercialism are some-
what strong in Japan relative to income. We see the country investing neither lightly nor heavily in research and innovation, and
its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income, Japan has very low
bureaucracy and red tape, somewhat low corruption, and somewhat strong rule of law, according to the international measures
we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Japan’s indebtedness position is worse than other countries, ranked 32nd out of the 35 countries we look at. Based on current debt
levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around 441% of
GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither supported
nor depressed by credit creation, which is neutral for growth going forward. Lastly, monetary policy in Japan is constrained.

31
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF KOREA

This is our computer generated reading for Korea as of July 2024.

Based on the latest readings of key indicators, Korea appears to be a middle of the pack power (#6 among major countries
today) in gradual ascent, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key
strength of Korea is its innovation/technology. Its weaknesses are its relative lack of natural resources, its relatively small
economy, and its lack of reserve currency status. The eight major measures of power are somewhat weak today but have, in
aggregate, risen slowly over the last 20 years. In particular, Korea’s share of global output, its innovation and technology, and its
importance as a financial center are strengthening.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Korea, the big cycles look mixed.

Korea is in a somewhat favorable position in its economic and financial cycles, with a low debt burden but moderate expected
real growth over the next 10 years (1.8% per year). In the last 3 years, real growth has been 2.7% per year, above our longer-term
expectations. Over the same time, the stock market in Korea has returned -15.0% below cash, meaningfully underperforming
the rest of the world (17.1%). Debt levels are high (269% of GDP across non-financial sectors). Breaking this down, government
debt levels are low (47% of GDP); household debt levels are modest (99% of GDP); and non-financial corporate debt levels are
high (123% of GDP). The bulk (97%) of these debts are in its own currency, which mitigates its debt risks. Korea has modestly
more foreign assets than foreign debts (net international investment position is 44% of GDP). The ability to use interest rate cuts
to stimulate the economy is modest (short rates at 3.4%).

At this time, we do not have a read on internal disorder for Korea because we lack sufficient reliable data. Wealth, income and
values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top
10% in Korea capture 11% and 33% of income (both the 20th highest share across major countries) and 26% and 59% of wealth
(respectively the 15th and 13th highest share across major countries).

Looking in more detail at the eight key measures of power—Korea has a relatively strong reading on our measures of tech-
nology and innovation. A moderate share (8%) of global patent applications, a moderate share (5%) of global R&D spending
and a moderate share (5%) of global researchers are in Korea. On technology, 2.3% of the world’s technology companies by value
are listed in Korea while it comprises only 1.7% of the total global equity market cap.

We net this against its relatively small economy and its lack of reserve currency status. A small share of global currency
reserves are in KRW (less than 1%), and a small share of global debt is denominated in KRW (less than 1%).

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Korea scores neutral on our
happiness index (-0.2z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.3z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Korea is 84 compared to a global average of 75.

32
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

KOREA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.32 Rank: 6 Getting Better Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.1 7 Getting Worse Getting Worse

Debt Burden Low Debt 0.6 4 Flat Flat

Expected Growth 1.8% -0.5 12 Getting Worse Getting Worse

Internal Order - - - - -

Wealth/Values Gap Narrow 0.7 4 Flat Getting Better

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Innovation and Technology Average 0.3 3 Getting Better Getting Better

Education Average 0.2 4 Flat Flat

Military Average -0.3 8 Flat Flat

Financial Center Average -0.3 10 Flat Getting Better

Competitiveness Average 0.1 12 Flat Getting Better

Trade Weak -0.7 12 Flat Getting Worse

Reserve Currency Status Weak -0.7 15 - Flat

Economic Output Weak -0.9 15 Getting Better Getting Better

Additional Measures of Power

Infrastructure & Investment Average 0.0 4 Flat Flat

Character/Determination/Civility Strong 0.9 8 Getting Worse Getting Worse

Resource Allocation Efficiency Average -0.1 10 Getting Worse Getting Worse

Governance/Rule of Law Average -0.1 12 Getting Better Getting Better

Geology Weak -0.8 23 Flat Getting Worse

Acts of Nature Very Strong 1.7 1 - Getting Better

Wellbeing

Happiness Gauge Moderate -0.2 23 - Flat

Health Gauge Excellent 2.3 5 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Korea.

This computer-generated report is our best attempt to synthesize conditions in Korea. If anything
sounds off, we’d love your comments.

33
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SOUTH KOREA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that South Korea’s real growth rate over the next 10 years will be in the vicinity
of 1.8%. This growth rate is roughly at the global average, ranked 20th out of 35 major economies, and 3rd out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In South Korea’s case, our growth estimate comes from combining our expectation of a 3.0% growth rate per worker, which is
somewhat above the global average, and a labor force growth rate of -1.2%, which will weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect South Korea’s productivity growth to be somewhat better than most major countries (implying
a growth rate of 3.6% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth
rate of 1.8% on its own). As shown below, South Korea’s biggest relative strengths are its level of innovation/commercialism and
the value its workers provide relative to education levels, and its biggest relative problems are its debt and debt service levels and
its shrinking workforce. The various gauges and weights are shown below. The individual indicators that are behind them are
explained in the appendix of this study. Please review this table to understand our comments.

SOUTH KOREA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.8% 20

Working-Age Population Growth -1.2% 35

Growth Per Worker Estimate 3.0% 9

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 12

What You Pay vs. What You Get 45% 18

Education 11% 13

Labor Productivity 11% 18

Working Hard 11% 20

Investing 11% 19

Culture 20% 6

Corruption 3% 29

Bureaucracy 3% 15

Rule of Law 3% 11

Savoring Life vs. Achieving 3% 9

Innovation 3% 1

Self Sufficiency 3% 10

Indebtedness 35% 31

Debt Levels and Flow 18% 19

Monetary Policy 18% 26

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

34
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on South Korea

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

South Korea offers around average value, ranked 18th of 35 countries we measure. Its workers are somewhat inexpensive, espe-
cially taking into consideration South Korea’s high levels of education (according to tertiary education rates) and very good
quality of education (according to PISA test scores). Further, people in South Korea work an average number of hours relative
to the cost of their labor—the average person of working age works 25.7 hours per week (8th out of 35 countries, and 15th out
of 35 countries after adjusting for income), although the demographics of the workforce are very unfavorable (according to the
projected 10-year change in the dependency ratio). Levels of saving and investing are roughly average given South Korea’s high
per capita income levels, with investment at about 29% of GDP (2nd out of 35 countries). South Korea’s capital stock per capita
(its structures, machinery, transportation equipment, software and intellectual property) is growing at a rate of 3.2% per year
(vs. an average of +1% across the developed world). Investment in Korea is about as productive as investment in other countries
with similar levels of economic development, ranked 10th out of 17 developed countries (measuring productivity as incremental
growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

South Korean culture appears to be a significant contributor to growth in coming years, ranked 6th among the countries we
measure. Note that our culture measures compare South Korea to countries of similar levels of economic development. Starting
with self-sufficiency, South Korea is rated about average on this measure, weighing that its workers have a somewhat weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is low (with government outlays of 26% of GDP and transfer payments to households of 14% of GDP), and its labor markets
are moderately flexible. South Korea also seems to value savoring about the same as it values achieving—again, its work ethic
is somewhat weak, but surveys suggest that its people value accomplishment and achievement. Furthermore, innovation and
commercialism are very strong in South Korea relative to income. We see the country investing very heavily in research and
innovation, and its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income,
South Korea has somewhat low bureaucracy and red tape, somewhat high corruption, and somewhat strong rule of law, according
to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
South Korea’s indebtedness position is worse than other countries, ranked 31st out of the 35 countries we look at. Based on cur-
rent debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around
266% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither
supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is
generally a bit tight.

35
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF INDIA

This is our computer generated reading for India as of July 2024.

Based on the latest readings of key indicators, India appears to be a middle of the pack power (#7 among major countries
today) in ascent, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strengths of
India are its strong economic and financial position, its cost-competitive labor (on a quality-adjusted basis), and its people’s
self-sufficiency and strong work ethic. Its weaknesses are its bad reading on innovation and technology, its corruption and
inconsistent rule of law, and its lack of reserve currency status. The eight major measures of power are mixed today but have, in
aggregate, risen over the last 20 years. In particular, India’s innovation and technology, its importance as a financial center, and
its relative military strength are strengthening.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For India, the big cycles look somewhat favorable, though we have a limited read.

India is in a highly favorable position in its economic and financial cycles, with a low debt burden and high expected real
growth over the next 10 years (6.3% per year). In the last 3 years, real growth has been 6.0% per year, around our longer-term
expectations. Over the same time, the stock market in India has returned 36.0% above cash, meaningfully outperforming the
rest of the world (17.1%). Debt levels are modest (178% of GDP across non-financial sectors). Breaking this down, government
debt levels are modest (84% of GDP); household debt levels are low (38% of GDP); and non-financial corporate debt levels are
modest (56% of GDP). The bulk (95%) of these debts are in its own currency, which mitigates its debt risks. India has slightly
more foreign debts than foreign assets (net international investment position is -11% of GDP).

At this time, we do not have a read on internal disorder for India because we lack sufficient reliable data. Wealth, income and
values gaps are relatively large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and
top 10% in India capture 22% and 57% of income (respectively the 3th and 4th highest share across major countries) and 32%
and 64% of wealth (respectively the 8th and 9th highest share across major countries). Over the last decade, incomes for the top
10% grew 52% while incomes for the bottom 60% grew 83%. The relatively high income growth for the bottom 60% reduces
the risks from inequality. A wide wealth gap is less concerning in a fast growing country like India because the fast growth can
create rising prosperity for all.

Looking in more detail at the eight key measures of power—India has the cheapest labor among major countries. Adjusted
for worker quality, labor is significantly cheaper than the global average.

We net this against its bad reading on innovation and technology and its lack of reserve currency status. With innovation
and technology—a small share (less than 1%) of global patent applications, a small share (2%) of global R&D spending and a
moderate share (2%) of global researchers are in India. A small share of global currency reserves are in INR (less than 1%), and a
small share of global debt is denominated in INR (2%). On technology, only 0.8% of the world’s technology companies by value
are listed in India even though it comprises 4.9% of the total global equity market cap.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. India scores modestly low on
our happiness index (-0.5z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores modestly low on our health index (-1.4z, which
measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life
expectancy at birth (in years) in India is 68 compared to a global average of 75.

36
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INDIA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.30 Rank: 7 Getting Better Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Highly Favorable 1.0 3 Getting Worse Getting Worse

Debt Burden Low Debt 0.3 7 Flat Getting Worse

Expected Growth 6.3% 1.1 1 Getting Worse Getting Worse

Internal Order - - - - -

Wealth/Values Gap Relatively Large 0.0 14 Getting Worse Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Very Strong 2.4 1 Flat Getting Worse

Military Average 0.4 4 Getting Better Flat

Economic Output Average 0.1 4 Flat Flat

Trade Weak -0.7 11 Flat Getting Better

Financial Center Weak -0.6 15 Getting Better Getting Better

Education Weak -0.8 15 Flat Getting Better

Reserve Currency Status Weak -0.7 19 Flat Flat

Innovation and Technology Weak -1.1 19 Getting Better Getting Better

Additional Measures of Power

Character/Determination/Civility Strong 1.4 5 Getting Better Getting Better

Resource Allocation Efficiency Average 0.2 7 Getting Better Getting Worse

Geology Average 0.2 9 Flat Getting Worse

Infrastructure & Investment Average -0.4 9 Getting Better Flat

Governance/Rule of Law Weak -1.2 16 Flat Getting Worse

Acts of Nature Very Weak -2.4 23 - Getting Better

Wellbeing

Happiness Gauge Low -0.5 24 - Flat

Health Gauge Low -1.4 23 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for India.

This computer-generated report is our best attempt to synthesize conditions in India. If anything sounds
off, we’d love your comments.

37
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INDIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that India’s real growth rate over the next 10 years will be in the vicinity of 6.3%.
This growth rate is well above the global average, ranked 1st out of 35 major economies, and 1st out of 18 emerging countries. As
a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the Appen-
dix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks, natural
disasters, or wars).

In India’s case, our growth estimate comes from combining our expectation of a 5.3% growth rate per worker, which is well above
the global average, and a labor force growth rate of 0.9%, which will boost growth. The growth in output per worker is driven
significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in indebtedness
tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our productivity
measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect India’s productivity growth to be much better than most major countries (implying a growth
rate of 6.1% on its own), and indebtedness conditions to be slightly better than other countries (implying a growth rate of 3.8%
on its own). As shown below, India’s biggest relative strengths are its levels of investment and how hard its people work, and its
biggest relative problems are its debt and debt service levels and its reliance on credit flows for growth (though compared to other
countries it doesn’t rate especially poorly on these measures). The various gauges and weights are shown below. The individual
indicators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

INDIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 6.3% 1

Working-Age Population Growth 0.9% 3

Growth Per Worker Estimate 5.3% 1

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 1

What You Pay vs. What You Get 45% 1

Education 11% 1

Labor Productivity 11% 2

Working Hard 11% 1

Investing 11% 1

Culture 20% 2

Corruption 3% 1

Bureaucracy 3% 1

Rule of Law 3% 3

Savoring Life vs. Achieving 3% 4

Innovation 3% 9

Self Sufficiency 3% 7

Indebtedness 35% 4

Debt Levels and Flow 18% 9

Monetary Policy 18% 2

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

38
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on India

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

India offers much better than average value, ranked 1st of 35 countries we measure. Its workers are very inexpensive, even tak-
ing into consideration India’s low levels of education (according to tertiary education rates) and very poor quality of education
(according to PISA test scores). Further, people in India work very long hours relative to the cost of their labor—the average
person of working age works 32.5 hours per week (4th out of 35 countries, and 1st out of 35 countries after adjusting for income),
and the demographics of the workforce are favorable (according to the projected 10-year change in the dependency ratio). Levels
of saving and investing are high given India’s very low per capita income levels, with investment at about 16% of GDP (24th out
of 35 countries). India’s capital stock per capita (its structures, machinery, transportation equipment, software and intellectual
property) is growing at a relatively fast rate of 5.6% per year (vs. an average of +1% across the emerging world). Investment in
India is more productive than investment in other countries with similar levels of economic development, ranked 8th out of 18
emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Indian culture appears to be a significant contributor to growth in coming years, ranked 2nd among the countries we measure.
Note that our culture measures compare India to countries of similar levels of economic development. Starting with self-suf-
ficiency, India is rated pretty well on this measure, weighing that its workers have a somewhat weak work ethic (considering
a variety of indicators including hours worked, retirement age, and vacations), its level of government support is neutral (with
government outlays of 29% of GDP and transfer payments to households of 5% of GDP), and its labor markets are very flexible.
India also seems to value savoring about the same as it values achieving—again, its work ethic is somewhat weak, but surveys
suggest that its people highly value accomplishment and achievement. Furthermore, innovation and commercialism are some-
what strong in India relative to income. We see the country investing neither lightly nor heavily in research and innovation, and
its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income, India has very low
bureaucracy and red tape, very low corruption, and very strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
India’s indebtedness position is better than other countries, ranked 4th out of the 35 countries we look at. Based on current debt
levels and debt service costs, the country has a bit of room to lever up in the future. The total debt burden is around 136% of GDP
(incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither supported nor
depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally neutral.

39
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF UNITED KINGDOM

This is our computer generated reading for United Kingdom as of July 2024.

Based on the latest readings of key indicators, United Kingdom appears to be a middle of the pack power (#8 among major
countries today) on a flat trajectory. As shown in the table below, the key weaknesses of United Kingdom are its unfavorable
economic/financial position, its relative lack of natural resources, its relatively expensive labor (on a quality-adjusted basis),
and its poor infrastructure and low investment. The eight major measures of power are somewhat weak today and have, in
aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For United Kingdom, the big cycles look mostly unfavorable.

The UK is in an unfavorable position in its economic and financial cycles, with a high debt burden and relatively low expected
real growth over the next 10 years (1.3% per year). In the last 3 years, real growth has been 3.3% per year, above our longer-term
expectations. Over the same time, the stock market in United Kingdom has returned 21.8% above cash, in line with the rest of
the world (17.1%). Debt levels are high (244% of GDP across non-financial sectors). Breaking this down, government debt levels
are high (103% of GDP); household debt levels are modest (78% of GDP); and non-financial corporate debt levels are modest
(63% of GDP). The bulk (92%) of these debts are in its own currency, which mitigates its debt risks. The UK has modestly more
foreign debts than foreign assets (net international investment position is -27% of GDP). The ability to use interest rate cuts to
stimulate the economy is high (short rates at 5.1%).

Internal disorder is a moderate risk. Wealth, income and values gaps are relatively large (relative to countries of similar per
capita income levels). Regarding inequality—the top 1% and top 10% in United Kingdom capture 12% and 36% of income
(respectively the 15th and 17th highest share across major countries) and 21% and 57% of wealth (respectively the 22nd and 20th
highest share across major countries). Our internal conflict gauge is high and getting worse. This gauge measures actual conflict
events (i.e., protests), political conflict (i.e., partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power, we would call out its relatively expensive labor (on a quality-ad-
justed basis). Adjusted for worker quality, labor is somewhat more expensive than the global average.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. The United Kingdom scores high
on our happiness index (1.7z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.3z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy
at birth (in years) in the United Kingdom is 82 compared to a global average of 75.

40
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

UNITED KINGDOM—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.29 Rank: 8 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Unfavorable -1.6 23 Getting Worse Getting Worse

Debt Burden High Debt -1.9 23 Getting Worse Getting Worse

Expected Growth 1.3% -0.7 15 Flat Getting Worse

Internal Order Moderate Risk -0.6 8 Getting Worse Getting Worse

Wealth/Values Gap Relatively Large -0.1 15 Getting Worse Flat

Internal Conflict High -1.1 9 Getting Worse Getting Worse

External Order - 0.3 - Flat Getting Worse

Key Eight Measures of Power

Financial Center Average 0.0 4 Getting Worse Flat

Reserve Currency Status Average -0.4 4 Flat Flat

Military Average -0.1 5 Flat Flat

Trade Average -0.5 5 Flat Flat

Education Average -0.1 6 Flat Flat

Innovation and Technology Average -0.3 7 Flat Getting Better

Economic Output Weak -0.6 8 Flat Flat

Competitiveness Weak -0.5 18 Flat Getting Worse

Additional Measures of Power

Governance/Rule of Law Strong 1.0 4 Flat Getting Worse

Resource Allocation Efficiency Average -0.4 12 Flat Getting Worse

Character/Determination/Civility Average -0.3 16 Flat Flat

Infrastructure & Investment Weak -0.6 16 Flat Getting Better

Geology Weak -0.8 21 Flat Flat

Acts of Nature Average 0.4 8 - Getting Worse

Wellbeing

Happiness Gauge Good 1.7 1 - Flat

Health Gauge Excellent 2.3 6 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for the United Kingdom.

This computer-generated report is our best attempt to synthesize conditions in the United Kingdom. If
anything sounds off, we’d love your comments.

41
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE UNITED KINGDOM’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that the United Kingdom’s real growth rate over the next 10 years will be in the
vicinity of 1.3%. This growth rate is somewhat below the global average, ranked 23rd out of 35 major economies, and 5th out of
17 developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statis-
tics detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity
or political shocks, natural disasters, or wars).

In the United Kingdom’s case, our growth estimate comes from combining our expectation of a 0.9% growth rate per worker,
which is well below the global average, and a labor force growth rate of 0.4%, which will moderately boost growth. The growth in
output per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while
swings in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we
weigh our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision
here).

Over the next 10 years, we expect the United Kingdom’s productivity growth to be somewhat worse than most major countries
(implying a growth rate of 1.6% on its own), and indebtedness conditions to be worse than other countries (implying a growth
rate of -0.4% on its own). As shown below, the United Kingdom’s biggest relative strengths are its level of bureaucracy and its
rule of law, and its biggest relative problems are its debt and debt service levels and its monetary policy. The various gauges and
weights are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please
review this table to understand our comments.

UNITED KINGDOM—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.3% 23

Working-Age Population Growth 0.4% 10

Growth Per Worker Estimate 0.9% 29

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 23

What You Pay vs. What You Get 45% 28

Education 11% 23

Labor Productivity 11% 28

Working Hard 11% 21

Investing 11% 34

Culture 20% 14

Corruption 3% 10

Bureaucracy 3% 9

Rule of Law 3% 9

Savoring Life vs. Achieving 3% 23

Innovation 3% 13

Self Sufficiency 3% 23

Indebtedness 35% 35

Debt Levels and Flow 18% 31

Monetary Policy 18% 32

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

42
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on United Kingdom

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

The United Kingdom offers somewhat worse than average value, ranked 28th of 35 countries we measure. Its workers are neither
expensive nor inexpensive, weighing the United Kingdom’s about average levels of education (according to tertiary education
rates) and good quality of education (according to PISA test scores). Further, people in the United Kingdom don’t work long
hours relative to the cost of their labor—the average person of working age works 20.3 hours per week (23rd out of 35 countries,
and 25th out of 35 countries after adjusting for income), and the demographics of the workforce are unfavorable (according to the
projected 10-year change in the dependency ratio). Levels of saving and investing are somewhat low given the United Kingdom’s
high per capita income levels, with investment at about 19% of GDP (18th out of 35 countries). The United Kingdom’s capital
stock per capita (its structures, machinery, transportation equipment, software and intellectual property) is growing at a rate of
1.2% per year (vs. an average of +1% across the developed world). Investment in the United Kingdom is less productive than
investment in other countries with similar levels of economic development, ranked 16th out of 17 developed countries (measur-
ing productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

UK culture appears to be a somewhat better than average contributor to growth in coming years, ranked 14th among the coun-
tries we measure. Note that our culture measures compare the United Kingdom to countries of similar levels of economic devel-
opment. Starting with self-sufficiency, the United Kingdom is rated pretty poorly on this measure, weighing that its workers have
a relatively weak work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of
government support is high (with government outlays of 45% of GDP and transfer payments to households of 22% of GDP), and
its labor markets are very flexible. The United Kingdom also seems to value savoring a bit more than achieving—again, its work
ethic is relatively weak, and surveys suggest that its people don’t especially value accomplishment and achievement. Furthermore,
innovation and commercialism are about average in the United Kingdom relative to income. We see the country investing lightly
in research and innovation, though its outputs from innovation, including inventions and earnings, are very high. Finally, relative
to its income, the United Kingdom has very low bureaucracy and red tape, somewhat low corruption, and somewhat strong rule
of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
The United Kingdom’s indebtedness position is worse than other countries, ranked 35th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 401% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally tight.

43
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF FRANCE

This is our computer generated reading for France as of July 2024.

Based on the latest readings of key indicators, France appears to be a modest power (in the middle third of countries we rank)
on a flat trajectory. As shown in the table below, the key weaknesses of France are its unfavorable economic/financial posi-
tion, its people’s lower than average work ethic and low self-sufficiency, its relatively poor allocation of labor and capital,
and its relatively expensive labor (on a quality-adjusted basis). The eight major measures of power are somewhat weak today
and have, in aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For France, the big cycles look mixed.

France is in an unfavorable position in its economic and financial cycles, with a high debt burden and relatively low expected
real growth over the next 10 years (0.9% per year). In the last 3 years, real growth has been 2.4% per year, above our longer-term
expectations. Over the same time, the stock market in France has returned 20.6% above cash, somewhat above the rest of the
world (17.1%). Debt levels are high (311% of GDP across non-financial sectors). Breaking this down, government debt levels are
high (107% of GDP); household debt levels are modest (56% of GDP); and non-financial corporate debt levels are high (148%
of GDP). France’s debts are largely in euros, which increases France’s debt risks, since this is not a currency that France directly
controls. France has slightly more foreign debts than foreign assets (net international investment position is -25% of GDP). The
ability to use interest rate cuts to stimulate the economy is modest for the Eurozone (short rates are at 3.6%).

Internal disorder is a low risk. Wealth, income and values gaps are narrow (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in France capture 12% and 34% of income (respectively the 17th and 19th
highest share across major countries) and 26% and 59% of wealth (both the 14th highest share across major countries). Over the
last decade, incomes for the top 10% grew 6% while incomes for the bottom 60% grew 14%. The relatively low income growth for
the bottom 60% increases the risks from inequality. Our internal conflict gauge is average. This gauge measures actual conflict
events (i.e., protests), political conflict (i.e., partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power, we would call out its relatively expensive labor (on a quality-ad-
justed basis). Adjusted for worker quality, labor is somewhat more expensive than the global average.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. France scores modestly high on
our happiness index (1.0z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.2z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in France is 83 compared to a global average of 75.

44
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

FRANCE—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.27 Rank: 9 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Unfavorable -1.1 21 Getting Worse Getting Worse

Debt Burden High Debt -1.0 22 Getting Worse Getting Worse

Expected Growth 0.9% -0.8 19 Flat Getting Better

Internal Order Low Risk 0.4 4 Flat Flat

Wealth/Values Gap Narrow 0.8 2 Flat Getting Worse

Internal Conflict Average 0.0 6 Flat Flat

External Order - - - - -

Key Eight Measures of Power

Trade Average -0.5 6 Flat Flat

Financial Center Average -0.2 7 Flat Flat

Military Average -0.2 7 Flat Flat

Innovation and Technology Average -0.4 9 Flat Getting Better

Economic Output Weak -0.6 9 Getting Worse Getting Worse

Education Weak -0.6 12 Flat Flat

Competitiveness Weak -0.7 21 Flat Getting Better

Reserve Currency Status - - - - -

Additional Measures of Power

Infrastructure & Investment Average -0.3 8 Getting Better Getting Better

Governance/Rule of Law Average 0.4 11 Flat Flat

Geology Average -0.5 15 Getting Worse Getting Worse

Resource Allocation Efficiency Weak -1.3 19 Getting Worse Getting Worse

Character/Determination/Civility Weak -1.5 24 Flat Flat

Acts of Nature Average -0.1 12 - Getting Worse

Wellbeing

Happiness Gauge Moderate 1.0 11 - Flat

Health Gauge Excellent 2.2 10 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for France.

This computer-generated report is our best attempt to synthesize conditions in France. If anything
sounds off, we’d love your comments.

45
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

FRANCE’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that France’s real growth rate over the next 10 years will be in the vicinity of
0.9%. This growth rate is well below the global average, ranked 29th out of 35 major economies, and 11th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In France’s case, our growth estimate comes from combining our expectation of a 1.0% growth rate per worker, which is some-
what below the global average, and a labor force growth rate of -0.1%, which will moderately weigh on growth. The growth in
output per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while
swings in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we
weigh our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision
here).

Over the next 10 years, we expect France’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 1.1% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 0.9% on its own). As shown below, France’s biggest relative strengths are its level of bureaucracy and its rule of law, and its
biggest relative problems are its debt and debt service levels and how hard its people work. The various gauges and weights are
shown below. The individual indicators that are behind them are explained in the appendix of this study. Please review this table
to understand our comments.

FRANCE—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.9% 29

Working-Age Population Growth -0.1% 19

Growth Per Worker Estimate 1.0% 27

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 30

What You Pay vs. What You Get 45% 30

Education 11% 31

Labor Productivity 11% 30

Working Hard 11% 29

Investing 11% 26

Culture 20% 27

Corruption 3% 20

Bureaucracy 3% 24

Rule of Law 3% 19

Savoring Life vs. Achieving 3% 33

Innovation 3% 16

Self Sufficiency 3% 34

Indebtedness 35% 30

Debt Levels and Flow 18% 34

Monetary Policy 18% 17

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

46
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on France

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

France offers much worse than average value, ranked 30th of 35 countries we measure. Its workers are neither expensive nor inex-
pensive, weighing France’s low levels of education (according to tertiary education rates) and poor quality of education (according
to PISA test scores). Further, people in France don’t work long hours relative to the cost of their labor—the average person of
working age works 15.9 hours per week (35th out of 35 countries, and 35th out of 35 countries after adjusting for income), and
the demographics of the workforce are unfavorable (according to the projected 10-year change in the dependency ratio). Levels
of saving and investing are somewhat low given France’s high per capita income levels, with investment at about 21% of GDP
(12th out of 35 countries). France’s capital stock per capita (its structures, machinery, transportation equipment, software and
intellectual property) is growing at a rate of 1.4% per year (vs. an average of +1% across the developed world). Investment in
France is about as productive as investment in other countries with similar levels of economic development, ranked 13th out of
17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

French culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 27th among the
countries we measure. Note that our culture measures compare France to countries of similar levels of economic development.
Starting with self-sufficiency, France is rated very poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is very high (with government outlays of 58% of GDP and transfer payments to households of 31% of GDP), and its labor markets
are moderately rigid. France also seems to value savoring much more than achieving—again, its work ethic is relatively weak, and
surveys suggest that its people don’t value accomplishment and achievement. Furthermore, innovation and commercialism are
about average in France relative to income. We see the country investing neither lightly nor heavily in research and innovation,
and its outputs from innovation, including inventions and earnings, are about average. Finally, relative to its income, France
has somewhat low bureaucracy and red tape, average levels of corruption, and average rule of law, according to the international
measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
France’s indebtedness position is worse than other countries, ranked 30th out of the 35 countries we look at. Based on current
debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around 356%
of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither supported
nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally a
bit tight.

47
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF RUSSIA

This is our computer generated reading for Russia as of July 2024. Note we have lower confidence in our reading of Russia
given it is at war with Ukraine, which increases the chances that Russia’s readings may change in the future and that some of the
stats shown below may be misleading or incomplete.

Based on the latest readings of key indicators, Russia appears to be a modest power (in the middle third of countries we rank)
on a flat trajectory. As shown in the table below, the key strengths of Russia are its wealth of natural resources and its strong
military. Its weaknesses are its large domestic conflicts, its relative unimportance as a global financial center, its corruption
and inconsistent rule of law, and its poor infrastructure and low investment. The eight major measures of power are somewhat
weak today and have, in aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Russia, the big cycles look somewhat unfavorable.

Russia is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden and
moderate expected real growth over the next 10 years (2.9% per year). In the last 3 years, real growth has been 2.7% per year,
at our longer-term expectations. Over the same time, the stock market in Russia has returned -88.2% below cash, meaningfully
underperforming the rest of the world (17.1%). Debt levels are low (121% of GDP across non-financial sectors). Breaking this
down, government debt levels are low (21% of GDP); household debt levels are low (22% of GDP); and non-financial corporate
debt levels are modest (78% of GDP). The bulk (81%) of these debts are in its own currency, which mitigates its debt risks. Russia
has modestly more foreign assets than foreign debts (net international investment position is 25% of GDP).

Internal disorder is a high risk as far as we can tell. However, our read of internal order is muddied by the fact that people
have limited freedom of speech and ability to express their oppositions relative to most other countries. Wealth, income
and values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top
10% in Russia capture 22% and 49% of income (respectively the 2th and 7th highest share across major countries) and 48% and
74% of wealth (respectively the 3th and 4th highest share across major countries). Our internal conflict gauge is very high (low
conf. read). This gauge measures actual conflict events (i.e., protests), political conflict (i.e., partisanship), and general discontent
(based on surveys); of course, Russia’s current war has an enormous impact on its economy and global geopolitical standing.

Looking in more detail at the eight key measures of power—Russia has a relatively strong military. A moderate share (5%) of
global military spending is by Russia, and it has a moderate share (8%) of the world’s military personnel.

We net this against its relative unimportance as a global financial center. Its equity markets are a small share of the world total
(less than 1% of free-float market cap and less than 1% of volume), and a small share of global transactions happen in RUB (1%).

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Russia scores neutral on our hap-
piness index (-0.0z, which measures survey responses like the share of people that reported being happy in the country and other
indications of societal satisfaction like low suicide rates) and scores neutral on our health index (0.0z, which measures factors like
life expectancy, exposure to pollution, and homicide rates among other indicators).

48
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

RUSSIA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.26 Rank: 10 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable 0.0 10 - Getting Worse

Debt Burden Moderately High Debt 0.0 12 Getting Worse Getting Worse

Expected Growth 2.9% -0.1 7 - Getting Better

Internal Order High Risk -1.8 10 Flat Getting Worse

Wealth/Values Gap Large -2.0 20 Getting Worse Flat

Internal Conflict Very High (low conf. read) -1.6 10 Flat Getting Worse

External Order - -1.2 - Getting Worse Getting Worse

Key Eight Measures of Power

Military Strong 0.6 3 Flat Flat

Competitiveness Strong 0.9 5 Flat Getting Better

Economic Output Average -0.5 7 Flat Flat

Reserve Currency Status Weak -0.7 8 - Getting Better

Education Weak -0.7 13 Flat Flat

Innovation and Technology Weak -0.7 14 Flat Getting Worse

Trade Weak -1.0 17 Flat Flat

Financial Center Weak -1.3 24 Getting Worse Getting Worse

Additional Measures of Power

Geology Very Strong 2.0 1 Getting Better Getting Better

Character/Determination/Civility Average 0.3 10 Flat Getting Better

Resource Allocation Efficiency Average -0.2 11 - Flat

Governance/Rule of Law Very Weak -2.0 21 Flat Getting Worse

Infrastructure & Investment Weak -1.2 23 Getting Worse Flat

Acts of Nature Average -0.1 11 - Getting Better

Wellbeing

Happiness Gauge Moderate 0.0 21 - Flat

Health Gauge Moderate 0.0 20 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Russia.

This computer-generated report is our best attempt to synthesize conditions in Russia. If anything
sounds off, we’d love your comments.

49
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

RUSSIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Russia’s real growth rate over the next 10 years will be in the vicinity of
2.9%. This growth rate is somewhat above the global average, ranked 9th out of 35 major economies, and 9th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars). Please note that Russia is a very large net exporter of commodities (net commodity exports are
~24% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have a view on the long-term
growth in commodity exports.

In Russia’s case, our growth estimate comes from combining our expectation of a 3.1% growth rate per worker, which is well
above the global average, and a labor force growth rate of -0.3%, which will moderately weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Russia’s productivity growth to be somewhat better than most major countries (implying a
growth rate of 3.2% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 2.7% on its own). As shown below, Russia’s biggest relative strengths are the value its workers provide relative to education
levels and its level of bureaucracy, and its biggest relative problems are its monetary policy and how hard its people work. The
various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this
study. Please review this table to understand our comments.

RUSSIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.9% 9

Working-Age Population Growth -0.3% 23

Growth Per Worker Estimate 3.1% 7

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 9

What You Pay vs. What You Get 45% 6

Education 11% 5

Labor Productivity 11% 5

Working Hard 11% 10

Investing 11% 9

Culture 20% 19

Corruption 3% 31

Bureaucracy 3% 10

Rule of Law 3% 25

Savoring Life vs. Achieving 3% 13

Innovation 3% 21

Self Sufficiency 3% 12

Indebtedness 35% 6

Debt Levels and Flow 18% 6

Monetary Policy 18% 27

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
50
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Russia

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Russia offers much better than average value, ranked 6th of 35 countries we measure. Its workers are somewhat inexpensive,
weighing Russia’s somewhat high levels of education (according to tertiary education rates) and about average quality of educa-
tion (according to PISA test scores). Further, people in Russia work long hours relative to the cost of their labor—the average per-
son of working age works 25.0 hours per week (10th out of 35 countries, and 11th out of 35 countries after adjusting for income),
although the demographics of the workforce are about average (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are roughly average given Russia’s low per capita income levels, with investment at about
14% of GDP (30th out of 35 countries). Russia’s capital stock per capita (its structures, machinery, transportation equipment,
software and intellectual property) is growing at a rate of 1.5% per year (vs. an average of +1% across the emerging world). Invest-
ment in Russia is more productive than investment in other countries with similar levels of economic development, ranked 1st
out of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Russian culture appears to be an around average contributor to growth in coming years, ranked 19th among the countries we
measure. Note that our culture measures compare Russia to countries of similar levels of economic development. Starting with
self-sufficiency, Russia is rated about average on this measure, weighing that its workers have a relatively weak work ethic (con-
sidering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is high
(with government outlays of 36% of GDP and transfer payments to households of 19% of GDP), and its labor markets are very
flexible. Russia also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, and surveys
suggest that its people don’t especially value accomplishment and achievement. Furthermore, innovation and commercialism are
about average in Russia relative to income. We see the country investing lightly in research and innovation, and its outputs from
innovation, including inventions and earnings, are about average. Finally, relative to its income, Russia has very low bureaucracy
and red tape, somewhat high corruption, and average rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Russia’s indebtedness position is better than other countries, ranked 6th out of the 35 countries we look at. Based on current debt
levels and debt service costs, the country has a bit of room to lever up in the future. The total debt burden is around 121% of GDP,
compared to a global average of 236%. In the past few years, its growth was neither supported nor depressed by credit creation,
which is neutral for growth going forward. Lastly, the stance of monetary policy is generally a bit tight.

51
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF SINGAPORE

This is our computer generated reading for Singapore as of July 2024.

Based on the latest readings of key indicators, Singapore appears to be a modest power (in the middle third of countries we
rank) in gradual ascent, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key
strengths of Singapore are its people’s self-sufficiency and strong work ethic, its strong rule of law/low corruption, and its
effective allocation of labor and capital. Its weaknesses are its relatively weak military, its relatively small economy, and its
relative lack of natural resources. The eight major measures of power are somewhat weak today but have, in aggregate, risen
slowly over the last 20 years. Note that Singapore generally scores well on our measures of quality but less well on quantity given
its small size. You can see more detail on our per capita scores at the end of the overall report.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Singapore, the big cycles look mixed.

Singapore is in a somewhat favorable position in its economic and financial cycles, with a low debt burden and moderate
expected real growth over the next 10 years (2.6% per year). In the last 3 years, real growth has been 4.1% per year, above our
longer-term expectations. Over the same time, the stock market in Singapore has returned -4.8% below cash, meaningfully
underperforming the rest of the world (17.1%). Debt levels are high (345% of GDP across non-financial sectors). Breaking this
down, government debt levels are high (172% of GDP), which we net against 379% of GDP in sovereign wealth and FX reserves;
household debt levels are low (46% of GDP); and non-financial corporate debt levels are high (127% of GDP), but as Singapore
is a financial center, this includes debts of foreigners that are issued in Singapore. A significant share (39%) of Singapore’s debt is
denominated in foreign currencies, which increases debt risks. Singapore has significantly more foreign assets than foreign debts
(net international investment position is 171% of GDP). The ability to use interest rate cuts to stimulate the economy is modest
(short rates at 3.8%).

At this time, we do not have a read on internal disorder for Singapore because we lack sufficient reliable data. Wealth, income and
values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10% in
Singapore capture 12% and 38% of income (respectively the 18th and 13th highest share across major countries) and 30% and
62% of wealth (both the 11th highest share across major countries).

Looking in more detail at the eight key measures of power, we would call out its relatively weak military and its relatively
small economy. A small share (less than 1%) of global military spending is by Singapore, and it has a small share (less than 1%)
of the world’s military personnel.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Singapore scores neutral on our
happiness index (0.5z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.4z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Singapore is 84 compared to a global average of 75.

52
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SINGAPORE—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.24 Rank: 11 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.2 5 Getting Worse Getting Worse

Debt Burden Low Debt 0.4 5 Getting Worse Getting Worse

Expected Growth 2.6% -0.2 8 Getting Worse Getting Worse

Internal Order - - - - -

Wealth/Values Gap Large -2.1 21 Getting Worse Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Trade Weak -0.6 8 Getting Better Getting Better

Financial Center Average -0.3 9 Flat Flat

Reserve Currency Status Weak -0.7 10 - Flat

Competitiveness Average 0.1 11 Flat Flat

Education Average -0.5 11 Flat Flat

Innovation and Technology Weak -0.5 11 Flat Getting Worse

Military Weak -1.1 20 Flat Getting Worse

Economic Output Weak -1.5 24 Getting Better Getting Better

Additional Measures of Power

Character/Determination/Civility Very Strong 2.7 1 Flat Getting Better

Governance/Rule of Law Very Strong 2.4 1 Getting Better Getting Better

Resource Allocation Efficiency Very Strong 2.1 5 Getting Better Getting Better

Infrastructure & Investment Average -0.2 6 Flat Flat

Geology Weak -0.5 17 Flat Flat

Acts of Nature Average -0.2 15 - Getting Better

Wellbeing

Happiness Gauge Moderate 0.5 19 - Flat

Health Gauge Excellent 2.4 1 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Singapore.

This computer-generated report is our best attempt to synthesize conditions in Singapore. If anything
sounds off, we’d love your comments.

53
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SINGAPORE’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Singapore’s real growth rate over the next 10 years will be in the vicinity
of 2.6%. This growth rate is somewhat above the global average, ranked 11th out of 35 major economies, and 11th out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Singapore’s case, our growth estimate comes from combining our expectation of a 2.8% growth rate per worker, which is some-
what above the global average, and a labor force growth rate of -0.2%, which will moderately weigh on growth. The growth in out-
put per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Singapore’s productivity growth to be somewhat better than most major countries (implying
a growth rate of 3.7% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 1.2% on its own). As shown below, Singapore’s biggest relative strengths are its level of bureaucracy and the value its workers
provide relative to education levels, and its biggest relative problems are its debt and debt service levels and its monetary policy.
However, we put less stock in our assessment of Singapore’s indebtedness given its significant stock of assets (e.g., FX reserves
and/or sovereign wealth fund assets) that are not considered in this measurement. The various gauges and weights are shown
below. The individual indicators that are behind them are explained in the appendix of this study. Please review this table to
understand our comments.

SINGAPORE—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.6% 11

Working-Age Population Growth -0.2% 22

Growth Per Worker Estimate 2.8% 10

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 8

What You Pay vs. What You Get 45% 17

Education 11% 16

Labor Productivity 11% 17

Working Hard 11% 16

Investing 11% 21

Culture 20% 1

Corruption 3% 9

Bureaucracy 3% 3

Rule of Law 3% 1

Savoring Life vs. Achieving 3% 2

Innovation 3% 5

Self Sufficiency 3% 2

Indebtedness 35% 22

Debt Levels and Flow 18% 17

Monetary Policy 18% 24

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
54
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Singapore

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Singapore offers around average value, ranked 17th of 35 countries we measure. Its workers are somewhat inexpensive, especially
taking into consideration Singapore’s high levels of education (according to tertiary education rates) and very good quality of edu-
cation (according to PISA test scores). Further, people in Singapore work long hours relative to the cost of their labor—the average
person of working age works 34.1 hours per week (3rd out of 35 countries, and 9th out of 35 countries after adjusting for income),
although the demographics of the workforce are very unfavorable (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are roughly average given Singapore’s very high per capita income levels, with investment at
about 21% of GDP (15th out of 35 countries). Singapore’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 2.9% per year (vs. an average of +1% across the emerging world).
Investment in Singapore is about as productive as investment in other countries with similar levels of economic development,
ranked 10th out of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Singaporean culture appears to be a significant contributor to growth in coming years, ranked 1st among the countries we
measure. Note that our culture measures compare Singapore to countries of similar levels of economic development. Starting
with self-sufficiency, Singapore is rated very well on this measure, weighing that its workers have a somewhat strong work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is very
low (with government outlays of 17% of GDP and transfer payments to households of 5% of GDP), and its labor markets are
very flexible. Singapore also seems to value achieving much more than savoring—again, its work ethic is somewhat strong, and
surveys suggest that its people highly value accomplishment and achievement. Furthermore, innovation and commercialism are
very strong in Singapore relative to income. We see the country investing neither lightly nor heavily in research and innovation,
and its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income, Singapore has
very low bureaucracy and red tape, somewhat low corruption, and very strong rule of law, according to the international measures
we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Singapore’s indebtedness position is slightly worse than other countries, ranked 22nd out of the 35 countries we look at. How-
ever, we put less stock in our assessment of Singapore’s indebtedness given its significant stock of assets (e.g., FX reserves and/or
sovereign wealth fund assets) that are not considered in this measurement. In the past few years, its growth was neither supported
nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally a
bit tight.

55
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF AUSTRALIA

This is our computer generated reading for Australia as of July 2024.

Based on the latest readings of key indicators, Australia appears to be a modest power (in the middle third of countries we
rank) on a flat trajectory. As shown in the table below, the key strength of Australia is its wealth of natural resources. Its
weaknesses are its relatively small economy, its relative unimportance to global trade, and its poor infrastructure and low
investment. The eight major measures of power are somewhat weak today and have, in aggregate, moved sideways over the last
20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Australia, the big cycles look somewhat unfavorable, though we have a limited read.

Australia is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden
and moderate expected real growth over the next 10 years (2.1% per year). In the last 3 years, real growth has been 3.1% per
year, above our longer-term expectations. Over the same time, the stock market in Australia has returned 16.2% above cash,
somewhat below the rest of the world (17.1%). Debt levels are high (223% of GDP across non-financial sectors). Breaking this
down, government debt levels are modest (54% of GDP); household debt levels are high (109% of GDP); and non-financial
corporate debt levels are modest (59% of GDP). The bulk (95%) of these debts are in its own currency, which mitigates its debt
risks. Australia has modestly more foreign debts than foreign assets (net international investment position is -32% of GDP). The
ability to use interest rate cuts to stimulate the economy is modest (short rates at 4.4%).

At this time, we do not have a read on internal disorder for Australia because we lack sufficient reliable data. Wealth, income and
values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10%
in Australia capture 10% and 33% of income (respectively the 23rd and 22nd highest share across major countries) and 23% and
57% of wealth (respectively the 20th and 21st highest share across major countries).

Looking in more detail at the eight key measures of power, we would call out its relatively small economy and its relative
unimportance to global trade. Australia exports just 2% of global exports.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Australia scores modestly high
on our happiness index (1.3z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.3z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy
at birth (in years) in Australia is 84 compared to a global average of 75.

56
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

AUSTRALIA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.23 Rank: 12 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.4 13 Flat Getting Better

Debt Burden Moderately High Debt -0.4 17 Flat Getting Better

Expected Growth 2.1% -0.4 10 Flat Getting Better

Internal Order - - - - -

Wealth/Values Gap Narrow 0.6 6 Getting Better Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Reserve Currency Status Weak -0.6 7 - Flat

Education Average -0.3 9 Flat Flat

Financial Center Average -0.3 12 Flat Flat

Innovation and Technology Weak -0.6 12 Getting Worse Getting Worse

Competitiveness Average -0.4 15 Flat Getting Better

Military Weak -0.7 15 Flat Flat

Trade Weak -1.1 21 Getting Better Getting Better

Economic Output Weak -1.3 21 Flat Flat

Additional Measures of Power

Geology Very Strong 1.9 2 Getting Better Getting Better

Governance/Rule of Law Strong 0.9 5 Flat Getting Better

Character/Determination/Civility Average 0.2 12 Flat Getting Better

Resource Allocation Efficiency Average -0.4 13 Getting Worse Flat

Infrastructure & Investment Weak -0.7 19 Getting Worse Getting Worse

Acts of Nature Strong 1.5 2 - Getting Better

Wellbeing

Happiness Gauge Good 1.3 6 - Flat

Health Gauge Excellent 2.3 7 - Getting Worse

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Australia.

This computer-generated report is our best attempt to synthesize conditions in Australia. If anything
sounds off, we’d love your comments.

57
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

AUSTRALIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Australia’s real growth rate over the next 10 years will be in the vicinity
of 2.1%. This growth rate is roughly at the global average, ranked 15th out of 35 major economies, and 2nd out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars). Please note that Australia is a large net exporter of commodities (net commodity exports are
~13% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have a view on the long-term
growth in commodity exports.

In Australia’s case, our growth estimate comes from combining our expectation of a 1.5% growth rate per worker, which is
somewhat below the global average, and a labor force growth rate of 0.6%, which will boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Australia’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 1.0% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 2.5% on its own). As shown below, Australia’s biggest relative strengths are its monetary policy and its low reliance on credit
flows for growth (though compared to other countries it doesn’t rate especially well on these measures), and its biggest relative prob-
lems are its debt and debt service levels and how hard its people work. The various gauges and weights are shown below. The individ-
ual indicators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

AUSTRALIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.1% 15

Working-Age Population Growth 0.6% 8

Growth Per Worker Estimate 1.5% 22

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 25

What You Pay vs. What You Get 45% 25

Education 11% 26

Labor Productivity 11% 32

Working Hard 11% 25

Investing 11% 25

Culture 20% 18

Corruption 3% 19

Bureaucracy 3% 22

Rule of Law 3% 15

Savoring Life vs. Achieving 3% 12

Innovation 3% 25

Self Sufficiency 3% 16

Indebtedness 35% 12

Debt Levels and Flow 18% 18

Monetary Policy 18% 3

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
58
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Australia

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Australia offers somewhat worse than average value, ranked 25th of 35 countries we measure. Its workers are neither expensive
nor inexpensive, weighing Australia’s somewhat low levels of education (according to tertiary education rates) and good qual-
ity of education (according to PISA test scores). Further, people in Australia don’t work long hours relative to the cost of their
labor—the average person of working age works 21.5 hours per week (18th out of 35 countries, and 23rd out of 35 countries
after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change
in the dependency ratio). Levels of saving and investing are somewhat low given Australia’s very high per capita income levels,
with investment at about 17% of GDP (23rd out of 35 countries). Australia’s capital stock per capita (its structures, machinery,
transportation equipment, software and intellectual property) is growing at a relatively slow rate of 0.4% per year (vs. an average
of +1% across the developed world). Investment in Australia is more productive than investment in other countries with similar
levels of economic development, ranked 1st out of 17 developed countries (measuring productivity as incremental growth for
each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Australian culture appears to be an around average contributor to growth in coming years, ranked 18th among the countries
we measure. Note that our culture measures compare Australia to countries of similar levels of economic development. Starting
with self-sufficiency, Australia is rated pretty poorly on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is
neutral (with government outlays of 40% of GDP and transfer payments to households of 20% of GDP), and its labor markets
are neither rigid nor flexible. Australia also seems to value savoring about the same as it values achieving—again, its work ethic is
relatively weak, and surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation
and commercialism are somewhat weak in Australia relative to income. We see the country investing lightly in research and
innovation, and its outputs from innovation, including inventions and earnings, are about average. Finally, relative to its income,
Australia has somewhat low bureaucracy and red tape, average levels of corruption, and somewhat strong rule of law, according
to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Australia’s indebtedness position is slightly better than other countries, ranked 12th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around
289% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was depressed
by low credit creation, which is supportive for growth going forward. Lastly, the stance of monetary policy is generally neutral.

59
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF TURKEY

This is our computer generated reading for Turkey as of July 2024.

Based on the latest readings of key indicators, Turkey appears to be a modest power (in the middle third of countries we rank)
in gradual ascent, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strength
of Turkey is its cost-competitive labor (on a quality-adjusted basis). Its weaknesses are its relative unimportance as a global
financial center, its weak relative position in education, its relative unimportance to global trade, and its corruption and
inconsistent rule of law. The eight major measures of power are somewhat weak today but have, in aggregate, risen slowly over
the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Turkey, the big cycles look somewhat favorable, though we have a limited read.

Turkey is in a somewhat favorable position in its economic and financial cycles, with a moderately low debt burden and
moderate expected real growth over the next 10 years (4.0% per year). In the last 3 years, real growth has been 5.8% per year,
above our longer-term expectations. Debt levels are low (93% of GDP across non-financial sectors). Breaking this down, govern-
ment debt levels are low (34% of GDP); household debt levels are low (11% of GDP); and non-financial corporate debt levels are
low (47% of GDP). A significant share (43%) of Turkey’s debt is denominated in foreign currencies, which increases debt risks.
Turkey has slightly more foreign debts than foreign assets (net international investment position is -25% of GDP).

At this time, we do not have a read on internal disorder for Turkey because we lack sufficient reliable data. Wealth, income and
values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10% in
Turkey capture 19% and 52% of income (respectively the 7th and 6th highest share across major countries) and 37% and 68% of
wealth (respectively the 6th and 8th highest share across major countries).

Looking in more detail at the eight key measures of power—Turkey has relatively cheap labor. Adjusted for worker quality,
labor is somewhat cheaper than the global average.

We net this against its relative unimportance as a global financial center, its weak relative position in education, and its rela-
tive unimportance to global trade. Turkey’s equity markets are a small share of the world total (less than 1% of free-float market
cap and less than 1% of volume), and a small share of global transactions happen in TRY (less than 1%). With education—Turkey
has a small share of the world’s bachelor’s degrees (1%) and a small share of the world’s doctorate degrees (less than 1%). On years
of education, Turkey is poor—students have on average 8.4 years of education vs 11.7 in the average major country. PISA scores,
which measure the proficiency of 15-year-old students across countries, are around average—462 vs 479 in the average major
country. Turkey exports just 1% of global exports.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Turkey scores neutral on our
happiness index (-0.1z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores modestly high on our health index (0.7z, which
measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators).

60
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

TURKEY—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.21 Rank: 13 Getting Better Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.3 4 Flat Getting Better

Debt Burden Moderately Low Debt 0.2 10 Getting Better Getting Better

Expected Growth 4.0% 0.3 4 Flat Flat

Internal Order - - - - -

Wealth/Values Gap Large -1.1 17 Getting Better Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 1.1 3 Getting Better Getting Better

Military Average -0.5 10 Flat Getting Worse

Economic Output Weak -0.7 10 Getting Better Flat

Innovation and Technology Weak -0.9 16 Getting Better Getting Better

Reserve Currency Status Weak -0.7 18 - Flat

Trade Weak -1.1 20 Getting Better Getting Better

Financial Center Weak -1.1 22 Getting Worse Flat

Education Very Weak -1.8 23 Flat Flat

Additional Measures of Power

Infrastructure & Investment Average -0.4 12 Getting Better Getting Better

Character/Determination/Civility Average -0.1 14 Flat Flat

Resource Allocation Efficiency Average -0.4 15 Getting Worse Getting Worse

Governance/Rule of Law Weak -1.2 17 Flat Flat

Geology Weak -0.6 19 Flat Getting Worse

Acts of Nature Average -0.1 13 - Getting Better

Wellbeing

Happiness Gauge Moderate -0.1 22 - Flat

Health Gauge Moderate 0.7 18 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Turkey.

This computer-generated report is our best attempt to synthesize conditions in Turkey. If anything
sounds off, we’d love your comments.

61
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

TURKEY’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Turkey’s real growth rate over the next 10 years will be in the vicinity of
4.0%. This growth rate is well above the global average, ranked 5th out of 35 major economies, and 5th out of 18 emerging coun-
tries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the
Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks,
natural disasters, or wars).

In Turkey’s case, our growth estimate comes from combining our expectation of a 3.6% growth rate per worker, which is well
above the global average, and a labor force growth rate of 0.4%, which will moderately boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Turkey’s productivity growth to be much better than most major countries (implying a growth
rate of 4.5% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth rate of
2.0% on its own). As shown below, Turkey’s biggest relative strengths are the value its workers provide relative to education levels
and its levels of investment, and its biggest relative problems are its monetary policy and how hard its people work. The various
gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study.
Please review this table to understand our comments.

TURKEY—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 4.0% 5

Working-Age Population Growth 0.4% 11

Growth Per Worker Estimate 3.6% 5

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 5

What You Pay vs. What You Get 45% 3

Education 11% 11

Labor Productivity 11% 1

Working Hard 11% 11

Investing 11% 7

Culture 20% 16

Corruption 3% 15

Bureaucracy 3% 8

Rule of Law 3% 14

Savoring Life vs. Achieving 3% 16

Innovation 3% 15

Self Sufficiency 3% 20

Indebtedness 35% 14

Debt Levels and Flow 18% 5

Monetary Policy 18% 34

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

62
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Turkey

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Turkey offers much better than average value, ranked 3rd of 35 countries we measure. Its workers are very inexpensive, even tak-
ing into consideration Turkey’s low levels of education (according to tertiary education rates) and very poor quality of education
(according to PISA test scores). Further, people in Turkey work long hours relative to the cost of their labor—the average person
of working age works 22.1 hours per week (17th out of 35 countries, and 14th out of 35 countries after adjusting for income),
although the demographics of the workforce are about average (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are somewhat high given Turkey’s low per capita income levels, with investment at about
26% of GDP (4th out of 35 countries). Turkey’s capital stock per capita (its structures, machinery, transportation equipment,
software and intellectual property) is growing at a rate of 3.9% per year (vs. an average of +1% across the emerging world). Invest-
ment in Turkey is about as productive as investment in other countries with similar levels of economic development, ranked 11th
out of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Turkish culture appears to be an around average contributor to growth in coming years, ranked 16th among the countries we
measure. Note that our culture measures compare Turkey to countries of similar levels of economic development. Starting
with self-sufficiency, Turkey is rated pretty poorly on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is
neutral (with government outlays of 32% of GDP and transfer payments to households of 11% of GDP), and its labor markets are
moderately flexible. Turkey also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, and
surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commercialism
are about average in Turkey relative to income. We see the country investing heavily in research and innovation, though its out-
puts from innovation, including inventions and earnings, are low. Finally, relative to its income, Turkey has very low bureaucracy
and red tape, average levels of corruption, and somewhat strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Turkey’s indebtedness position is slightly better than other countries, ranked 14th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has a moderate amount of room to lever up in the future. The total debt
burden is around 89% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth
was neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally tight.

63
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF CANADA

This is our computer generated reading for Canada as of July 2024.

Based on the latest readings of key indicators, Canada appears to be a modest power (in the middle third of countries we rank)
on a flat trajectory. As shown in the table below, the key weaknesses of Canada that put it in this position are its relatively
small economy, its relatively weak military, and its poor infrastructure and low investment. The eight major measures of
power are somewhat weak today and have, in aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Canada, the big cycles look somewhat unfavorable, though we have a limited read.

Canada is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden
and relatively low expected real growth over the next 10 years (1.2% per year). In the last 3 years, real growth has been 2.5%
per year, above our longer-term expectations. Over the same time, the stock market in Canada has returned 14.9% above cash,
somewhat below the rest of the world (17.1%). Debt levels are high (307% of GDP across non-financial sectors). Breaking this
down, government debt levels are modest (94% of GDP); household debt levels are modest (96% of GDP); and non-financial
corporate debt levels are high (118% of GDP). The bulk (89%) of these debts are in its own currency, which mitigates its debt
risks. Canada has significantly more foreign assets than foreign debts (net international investment position is 58% of GDP). The
ability to use interest rate cuts to stimulate the economy is modest (short rates at 4.5%).

At this time, we do not have a read on internal disorder for Canada because we lack sufficient reliable data. Wealth, income and
values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10%
in Canada capture 11% and 35% of income (respectively the 21st and 18th highest share across major countries) and 25% and
58% of wealth (both the 18th highest share across major countries).

Looking in more detail at the eight key measures of power, we would call out its relatively small economy and its relatively
weak military. A small share (1%) of global military spending is by Canada, and it has a small share (less than 1%) of the world’s
military personnel.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Canada scores modestly high on
our happiness index (1.2z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.2z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Canada is 83 compared to a global average of 75.

64
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CANADA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.21 Rank: 14 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.6 16 Flat Flat

Debt Burden Moderately High Debt -0.3 15 Flat Getting Better

Expected Growth 1.2% -0.7 18 Getting Worse Flat

Internal Order - - - - -

Wealth/Values Gap Narrow 0.5 10 Getting Better Getting Better

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Reserve Currency Status Weak -0.6 5 - Getting Better

Education Average -0.3 7 Flat Flat

Financial Center Average -0.3 11 Flat Getting Better

Innovation and Technology Weak -0.7 13 Getting Worse Flat

Trade Weak -0.8 13 Flat Getting Better

Competitiveness Weak -0.5 17 Flat Flat

Economic Output Weak -1.1 17 Flat Flat

Military Weak -1.0 18 Flat Flat

Additional Measures of Power

Geology Strong 0.7 5 Getting Worse Getting Worse

Resource Allocation Efficiency Average 0.3 6 Getting Worse Getting Worse

Governance/Rule of Law Strong 0.6 9 Getting Worse Flat

Character/Determination/Civility Average 0.1 13 Flat Flat

Infrastructure & Investment Weak -0.7 17 Getting Worse Getting Worse

Acts of Nature Strong 1.3 4 - Getting Better

Wellbeing

Happiness Gauge Good 1.2 7 - Flat

Health Gauge Excellent 2.2 9 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Canada.

This computer-generated report is our best attempt to synthesize conditions in Canada. If anything
sounds off, we’d love your comments.

65
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CANADA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Canada’s real growth rate over the next 10 years will be in the vicinity
of 1.2%. This growth rate is somewhat below the global average, ranked 26th out of 35 major economies, and 8th out of 17
developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Canada’s case, our growth estimate comes from combining our expectation of a 0.9% growth rate per worker, which is well
below the global average, and a labor force growth rate of 0.3%, which will moderately boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Canada’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 0.8% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of
1.0% on its own). As shown below, Canada’s biggest relative strengths are its level of bureaucracy and the value its workers pro-
vide relative to education levels, and its biggest relative problems are its debt and debt service levels and how hard its people work.
The various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix
of this study. Please review this table to understand our comments.

CANADA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.2% 26

Working-Age Population Growth 0.3% 13

Growth Per Worker Estimate 0.9% 31

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 27

What You Pay vs. What You Get 45% 27

Education 11% 21

Labor Productivity 11% 25

Working Hard 11% 27

Investing 11% 33

Culture 20% 20

Corruption 3% 17

Bureaucracy 3% 18

Rule of Law 3% 18

Savoring Life vs. Achieving 3% 15

Innovation 3% 27

Self Sufficiency 3% 14

Indebtedness 35% 20

Debt Levels and Flow 18% 26

Monetary Policy 18% 10

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

66
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Canada

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Canada offers somewhat worse than average value, ranked 27th of 35 countries we measure. Its workers are neither expensive
nor inexpensive, although Canada has somewhat high levels of education (according to tertiary education rates) and very good
quality of education (according to PISA test scores). Further, people in Canada don’t work long hours relative to the cost of their
labor—the average person of working age works 20.9 hours per week (21st out of 35 countries, and 24th out of 35 countries
after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change
in the dependency ratio). Levels of saving and investing are somewhat low given Canada’s high per capita income levels, with
investment at about 16% of GDP (28th out of 35 countries). Canada’s capital stock per capita (its structures, machinery, trans-
portation equipment, software and intellectual property) is shrinking at a rate of -0.6% per year (vs. an average of +1% across the
developed world). Investment in Canada is about as productive as investment in other countries with similar levels of economic
development, ranked 9th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar
of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Canadian culture appears to be an around average contributor to growth in coming years, ranked 20th among the countries
we measure. Note that our culture measures compare Canada to countries of similar levels of economic development. Starting
with self-sufficiency, Canada is rated about average on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is
high (with government outlays of 45% of GDP and transfer payments to households of 24% of GDP), and its labor markets are
very flexible. Canada also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, and surveys
suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commercialism are
somewhat weak in Canada relative to income. We see the country investing lightly in research and innovation, and its outputs
from innovation, including inventions and earnings, are low. Finally, relative to its income, Canada has somewhat low bureau-
cracy and red tape, average levels of corruption, and average rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Canada’s indebtedness position is about average compared to other countries, ranked 20th out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden
is around 351% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally neutral.

67
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF SWITZERLAND

This is our computer generated reading for Switzerland as of July 2024.

Based on the latest readings of key indicators, Switzerland appears to be a modest power (in the middle third of countries we
rank) in decline, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key strength of
Switzerland is its strong rule of law/low corruption. Its weaknesses are its relatively weak military, its relatively small econ-
omy, and its relatively expensive labor (on a quality-adjusted basis). The eight major measures of power are somewhat weak
today and have, in aggregate, fallen over the last 20 years. In particular, Switzerland’s competitiveness, its share of global output,
and its importance as a financial center are declining. Note that Switzerland generally scores well on our measures of quality but
less well on quantity given its small size. You can see more detail on our per capita scores at the end of the overall report.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Switzerland, the big cycles look somewhat unfavorable, though we have a limited read.

Switzerland is in a moderately unfavorable position in its economic and financial cycles, with a moderately low debt burden
but very low expected real growth over the next 10 years (0.2% per year). In the last 3 years, real growth has been 2.4% per
year, above our longer-term expectations. Over the same time, the stock market in Switzerland has returned 8.3% above cash,
meaningfully underperforming the rest of the world (17.1%). Debt levels are high (300% of GDP across non-financial sectors).
Breaking this down, government debt levels are low (28% of GDP), which we net against 115% of GDP in sovereign wealth and
FX reserves; household debt levels are high (126% of GDP); and non-financial corporate debt levels are high (146% of GDP).
The bulk (85%) of these debts are in its own currency, which mitigates its debt risks. Switzerland has significantly more foreign
assets than foreign debts (net international investment position is 99% of GDP). The ability to use interest rate cuts to stimulate
the economy is modest (short rates at 1.1%).

At this time, we do not have a read on internal disorder for Switzerland because we lack sufficient reliable data. Wealth, income
and values gaps are relatively large (relative to countries of similar per capita income levels). Regarding inequality—the top 1%
and top 10% in Switzerland capture 10% and 31% of income (respectively the 22nd and 24th highest share across major coun-
tries) and 31% and 63% of wealth (both the 10th highest share across major countries).

Looking in more detail at the eight key measures of power, we would call out its relatively weak military, its relatively small
economy, and its relatively expensive labor (on a quality-adjusted basis). A small share (less than 1%) of global military spend-
ing is by Switzerland, and it has a small share (less than 1%) of the world’s military personnel. With labor cost, once we adjust
for worker quality, labor is somewhat more expensive than the global average.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Switzerland scores modestly high
on our happiness index (1.3z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.3z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy
at birth (in years) in Switzerland is 84 compared to a global average of 75.

68
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SWITZERLAND—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.19 Rank: 15 Getting Worse Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.5 15 - Getting Worse

Debt Burden Low Debt 0.2 8 Getting Worse Getting Worse

Expected Growth 0.2% -1.0 22 - Getting Worse

Internal Order - - - - -

Wealth/Values Gap Relatively Large -0.5 16 Flat Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Financial Center Average -0.3 8 Flat Flat

Innovation and Technology Average -0.3 8 Flat Getting Worse

Education Average -0.5 10 Flat Flat

Trade Weak -0.8 14 Getting Better Getting Better

Reserve Currency Status Weak -0.7 16 Flat Flat

Economic Output Weak -1.4 23 Getting Worse Flat

Competitiveness Weak -1.2 24 Getting Worse Getting Worse

Military Very Weak -2.0 24 Flat Flat

Additional Measures of Power

Governance/Rule of Law Strong 1.2 2 Flat Flat

Infrastructure & Investment Average -0.2 7 Flat Flat

Character/Determination/Civility Average 0.3 9 Getting Worse Getting Worse

Geology Average -0.4 14 Getting Better Getting Better

Resource Allocation Efficiency Average -0.4 16 Getting Worse Getting Worse

Acts of Nature Strong 1.3 5 - Getting Better

Wellbeing

Happiness Gauge Good 1.3 5 - Flat

Health Gauge Excellent 2.3 3 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Switzerland.

This computer-generated report is our best attempt to synthesize conditions in Switzerland. If anything
sounds off, we’d love your comments.

69
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SWITZERLAND’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Switzerland’s real growth rate over the next 10 years will be in the vicinity
of 0.2%. This growth rate is well below the global average, ranked 32nd out of 35 major economies, and 14th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Switzerland’s case, our growth estimate comes from combining our expectation of a 0.5% growth rate per worker, which is well
below the global average, and a labor force growth rate of -0.3%, which will moderately weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Switzerland’s productivity growth to be somewhat worse than most major countries (implying
a growth rate of 0.4% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 1.0% on its own). As shown below, Switzerland’s biggest relative strengths are its level of innovation/commercialism and its
level of bureaucracy, and its biggest relative problems are its debt and debt service levels and the value its workers provide relative
to education levels. However, we put less stock in our assessment of Switzerland’s indebtedness given its significant stock of
assets (e.g., FX reserves and/or sovereign wealth fund assets) that are not considered in this measurement. The various gauges
and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please
review this table to understand our comments.

SWITZERLAND—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.2% 32

Working-Age Population Growth -0.3% 24

Growth Per Worker Estimate 0.5% 35

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 31

What You Pay vs. What You Get 45% 34

Education 11% 33

Labor Productivity 11% 35

Working Hard 11% 33

Investing 11% 32

Culture 20% 9

Corruption 3% 21

Bureaucracy 3% 21

Rule of Law 3% 23

Savoring Life vs. Achieving 3% 21

Innovation 3% 2

Self Sufficiency 3% 9

Indebtedness 35% 27

Debt Levels and Flow 18% 32

Monetary Policy 18% 14

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
70
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Switzerland

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Switzerland offers much worse than average value, ranked 34th of 35 countries we measure. Its workers are very expensive, weigh-
ing Switzerland’s somewhat low levels of education (according to tertiary education rates) and good quality of education (according
to PISA test scores). Further, people in Switzerland don’t work long hours relative to the cost of their labor—the average person of
working age works 20.4 hours per week (22nd out of 35 countries, and 28th out of 35 countries after adjusting for income), and the
demographics of the workforce are very unfavorable (according to the projected 10-year change in the dependency ratio). Levels
of saving and investing are somewhat low given Switzerland’s very high per capita income levels, with investment at about 23% of
GDP (8th out of 35 countries). Switzerland’s capital stock per capita (its structures, machinery, transportation equipment, software
and intellectual property) is growing at a rate of 1.0% per year (vs. an average of +1% across the developed world). Investment in
Switzerland is about as productive as investment in other countries with similar levels of economic development, ranked 12th out
of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Swiss culture appears to be a somewhat better than average contributor to growth in coming years, ranked 9th among the coun-
tries we measure. Note that our culture measures compare Switzerland to countries of similar levels of economic development.
Starting with self-sufficiency, Switzerland is rated pretty well on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is low (with government outlays of 33% of GDP and transfer payments to households of 17% of GDP), and its labor
markets are very flexible. Switzerland also seems to value savoring a bit more than achieving—again, its work ethic is relatively
weak, and surveys suggest that its people don’t especially value accomplishment and achievement. Furthermore, innovation
and commercialism are very strong in Switzerland relative to income. We see the country investing heavily in research and
innovation, and its outputs from innovation, including inventions and earnings, are very high. Finally, relative to its income,
Switzerland has somewhat low bureaucracy and red tape, average levels of corruption, and average rule of law, according to the
international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Switzerland’s indebtedness position is slightly worse than other countries, ranked 27th out of the 35 countries we look at. How-
ever, we put less stock in our assessment of Switzerland’s indebtedness given its significant stock of assets (e.g., FX reserves
and/or sovereign wealth fund assets) that are not considered in this measurement. In the past few years, its growth was neither
supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is
generally a bit tight.

71
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF BRAZIL

This is our computer generated reading for Brazil as of July 2024.

Based on the latest readings of key indicators, Brazil appears to be a modest power (in the middle third of countries we rank)
on a flat trajectory. As shown in the table below, the key strength of Brazil is its wealth of natural resources. Its weaknesses
are its weak relative position in education, its bad reading on innovation and technology, its relative unimportance to global
trade, its corruption and inconsistent rule of law, its poor infrastructure and low investment, and its relatively poor alloca-
tion of labor and capital. The eight major measures of power are somewhat weak today and have, in aggregate, moved sideways
over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Brazil, the big cycles look somewhat unfavorable, though we have a limited read.

Brazil is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden
and relatively low expected real growth over the next 10 years (1.7% per year). In the last 3 years, real growth has been 2.4%
per year, above our longer-term expectations. Over the same time, the stock market in Brazil has returned -23.1% below cash,
meaningfully underperforming the rest of the world (17.1%). Debt levels are modest (169% of GDP across non-financial sectors).
Breaking this down, government debt levels are modest (84% of GDP); household debt levels are low (33% of GDP); and non-fi-
nancial corporate debt levels are modest (52% of GDP). The bulk (93%) of these debts are in its own currency, which mitigates
its debt risks. Brazil has modestly more foreign debts than foreign assets (net international investment position is -44% of GDP).

At this time, we do not have a read on internal disorder for Brazil because we lack sufficient reliable data. Wealth, income and
values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10% in
Brazil capture 20% and 58% of income (respectively the 5th and 3th highest share across major countries) and 48% and 79% of
wealth (both the 2th highest share across major countries). Over the last decade, incomes for the top 10% grew 3% while incomes
for the bottom 60% grew 6%. The relatively low income growth for the bottom 60% increases the risks from inequality.

Looking in more detail at the eight key measures of power, we would call out its weak relative position in education, its bad
reading on innovation and technology, and its relative unimportance to global trade. With education—Brazil has a small
share of the world’s bachelor’s degrees (3%) and a small share of the world’s doctorate degrees (2%). On years of education, Brazil
is poor—students have on average 9.4 years of education vs 11.7 in the average major country. PISA scores, which measure the
proficiency of 15-year-old students across countries, are poor—397 vs 479 in the average major country. With innovation and
technology—a small share (less than 1%) of global patent applications, a small share (2%) of global R&D spending and a small
share (2%) of global researchers are in Brazil. Brazil exports just 2% of global exports.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Brazil scores modestly high on
our happiness index (1.1z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores neutral on our health index (0.3z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the share of the
population undernourished in Brazil is 5% compared to a global average of 2%.

72
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

BRAZIL—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.18 Rank: 16 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.5 14 Getting Worse Getting Worse

Debt Burden Moderately High Debt -0.3 14 Getting Worse Getting Worse

Expected Growth 1.7% -0.5 13 Getting Worse Getting Worse

Internal Order - - - - -

Wealth/Values Gap Large -1.8 18 Getting Better Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 0.7 7 Getting Better Getting Better

Economic Output Weak -0.7 11 Flat Getting Worse

Military Weak -0.5 12 Flat Flat

Reserve Currency Status Weak -0.7 14 - Flat

Financial Center Weak -0.8 17 Flat Getting Better

Innovation and Technology Weak -1.0 18 Flat Getting Worse

Trade Weak -1.1 18 Getting Better Getting Better

Education Weak -1.3 19 Flat Getting Better

Additional Measures of Power

Geology Very Strong 1.9 3 Getting Better Getting Better

Character/Determination/Civility Weak -0.9 20 Getting Worse Flat

Resource Allocation Efficiency Weak -1.4 20 Getting Worse Getting Worse

Infrastructure & Investment Weak -1.1 21 Flat Getting Worse

Governance/Rule of Law Very Weak -2.4 23 Getting Worse Getting Worse

Acts of Nature Very Weak -2.4 24 - Getting Worse

Wellbeing

Happiness Gauge Good 1.1 9 - Flat

Health Gauge Moderate 0.3 19 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Brazil.

This computer-generated report is our best attempt to synthesize conditions in Brazil. If anything
sounds off, we’d love your comments.

73
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

BRAZIL’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Brazil’s real growth rate over the next 10 years will be in the vicinity of
1.7%. This growth rate is roughly at the global average, ranked 21st out of 35 major economies, and 18th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars). Please note that Brazil is a somewhat large net exporter of commodities (net commodity
exports are ~9% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have a view on the
long-term growth in commodity exports.

In Brazil’s case, our growth estimate comes from combining our expectation of a 1.6% growth rate per worker, which is roughly in
line with the global average, and a labor force growth rate of 0.1%, which will have little impact on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Brazil’s productivity growth to be about average compared to most major countries (implying a
growth rate of 1.6% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 1.1% on its own). As shown below, Brazil’s biggest relative strengths are the value its workers provide relative to education
levels and its levels of investment, and its biggest relative problems are its monetary policy and its debt and debt service levels.
The various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix
of this study. Please review this table to understand our comments.

BRAZIL—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.7% 21

Working-Age Population Growth 0.1% 17

Growth Per Worker Estimate 1.6% 21

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 15

What You Pay vs. What You Get 45% 9

Education 11% 7

Labor Productivity 11% 8

Working Hard 11% 15

Investing 11% 6

Culture 20% 32

Corruption 3% 26

Bureaucracy 3% 35

Rule of Law 3% 28

Savoring Life vs. Achieving 3% 32

Innovation 3% 20

Self Sufficiency 3% 28

Indebtedness 35% 13

Debt Levels and Flow 18% 14

Monetary Policy 18% 21

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
74
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Brazil

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Brazil offers somewhat better than average value, ranked 9th of 35 countries we measure. Its workers are somewhat inexpensive,
even taking into consideration Brazil’s low levels of education (according to tertiary education rates) and very poor quality of
education (according to PISA test scores). Further, people in Brazil work an average number of hours relative to the cost of their
labor—the average person of working age works 20.2 hours per week (24th out of 35 countries, and 16th out of 35 countries
after adjusting for income), although the demographics of the workforce are about average (according to the projected 10-year
change in the dependency ratio). Levels of saving and investing are somewhat high given Brazil’s low per capita income levels,
with investment at about 14% of GDP (31st out of 35 countries). Brazil’s capital stock per capita (its structures, machinery, trans-
portation equipment, software and intellectual property) is growing at a relatively slow rate of 0.0% per year (vs. an average of
+1% across the emerging world). Investment in Brazil is more productive than investment in other countries with similar levels
of economic development, ranked 5th out of 18 emerging countries (measuring productivity as incremental growth for each
additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Brazilian culture appears to be a much worse than average contributor to growth in coming years, ranked 32nd among the
countries we measure. Note that our culture measures compare Brazil to countries of similar levels of economic development.
Starting with self-sufficiency, Brazil is rated pretty poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is high (with government outlays of 47% of GDP and transfer payments to households of 15% of GDP), and its labor markets
are moderately rigid. Brazil also seems to value savoring much more than achieving—again, its work ethic is relatively weak, and
surveys suggest that its people don’t value accomplishment and achievement. Furthermore, innovation and commercialism are
about average in Brazil relative to income. We see the country investing neither lightly nor heavily in research and innovation,
and its outputs from innovation, including inventions and earnings, are low. Finally, relative to its income, Brazil has very high
bureaucracy and red tape, average levels of corruption, and somewhat weak rule of law, according to the international measures
we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Brazil’s indebtedness position is slightly better than other countries, ranked 13th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has little room to lever up in the future. The total debt burden is around
190% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither
supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is
generally a bit tight.

75
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF NETHERLANDS

This is our computer generated reading for Netherlands as of July 2024.

Based on the latest readings of key indicators, Netherlands is not a meaningful global power (in the bottom third of countries
we rank) on a flat trajectory. As shown in the table below, the key strengths of Netherlands are its high internal order and
its strong rule of law/low corruption. Its weaknesses are its relatively weak military, its relatively small economy, and its
relatively expensive labor (on a quality-adjusted basis). The eight major measures of power are somewhat weak today and have,
in aggregate, moved sideways over the last 20 years. Note that The Netherlands generally scores well on our measures of quality
but less well on quantity given its small size. You can see more detail on our per capita scores at the end of the overall report.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Netherlands, the big cycles look mixed.

The Netherlands is in a moderately unfavorable position in its economic and financial cycles, with a moderately low debt
burden but relatively low expected real growth over the next 10 years (1.2% per year). In the last 3 years, real growth has been
3.2% per year, above our longer-term expectations. Over the same time, the stock market in Netherlands has returned 30.0%
above cash, meaningfully outperforming the rest of the world (17.1%). Debt levels are high (255% of GDP across non-financial
sectors). Breaking this down, government debt levels are low (44% of GDP); household debt levels are modest (87% of GDP);
and non-financial corporate debt levels are high (125% of GDP), but as Netherlands is a financial center, this includes debts of
foreigners that are issued in Netherlands. The Netherlands’s debts are largely in euros, which increases Netherlands’s debt risks,
since this is not a currency that Netherlands directly controls. The Netherlands has significantly more foreign assets than foreign
debts (net international investment position is 57% of GDP). The ability to use interest rate cuts to stimulate the economy is
modest for the Eurozone (short rates are at 3.6%).

Internal disorder is a low risk. Wealth, income and values gaps are narrow (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in Netherlands capture 9% and 32% of income (respectively the 24th and
23rd highest share across major countries) and 17% and 49% of wealth (both the 23rd highest share across major countries). Our
internal conflict gauge is low and getting better. This gauge measures actual conflict events (i.e., protests), political conflict (i.e.,
partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power, we would call out its relatively weak military, its relatively small
economy, and its relatively expensive labor (on a quality-adjusted basis). A small share (less than 1%) of global military
spending is by Netherlands, and it has a small share (less than 1%) of the world’s military personnel. A small share (2%) of global
economic activity (adjusted for differences in prices across countries) is in Netherlands. With labor cost, once we adjust for worker
quality, labor is somewhat more expensive than the global average.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. The Netherlands scores high on
our happiness index (1.5z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.1z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in the Netherlands is 82 compared to a global average of 75.

76
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

NETHERLANDS—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.17 Rank: 17 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.4 12 Getting Better Getting Better

Debt Burden Moderately High Debt 0.0 11 Getting Better Getting Better

Expected Growth 1.2% -0.7 16 Flat Getting Worse

Internal Order Low Risk 0.8 2 Getting Better Getting Worse

Wealth/Values Gap Narrow 0.7 3 Getting Better Getting Worse

Internal Conflict Low 0.9 2 Getting Better Flat

External Order - - - - -

Key Eight Measures of Power

Trade Weak -0.6 9 Flat Flat

Innovation and Technology Average -0.4 10 Flat Flat

Financial Center Average -0.4 13 Flat Flat

Education Weak -0.8 14 Flat Getting Worse

Competitiveness Weak -0.8 22 Flat Getting Worse

Economic Output Weak -1.4 22 Flat Flat

Military Very Weak -1.7 23 Flat Flat

Reserve Currency Status - - - - -

Additional Measures of Power

Governance/Rule of Law Strong 1.1 3 Flat Flat

Resource Allocation Efficiency Average 0.1 9 Getting Better Getting Better

Infrastructure & Investment Average -0.4 10 Flat Getting Better

Geology Average -0.4 13 Getting Worse Getting Better

Character/Determination/Civility Average -0.3 17 Getting Better Flat

Acts of Nature Average 0.5 7 - Getting Worse

Wellbeing

Happiness Gauge Good 1.5 3 - Flat

Health Gauge Excellent 2.1 12 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for the Netherlands.

This computer-generated report is our best attempt to synthesize conditions in the Netherlands. If any-
thing sounds off, we’d love your comments.

77
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE NETHERLANDS’ PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that the Netherlands’s real growth rate over the next 10 years will be in the vicin-
ity of 1.2%. This growth rate is somewhat below the global average, ranked 24th out of 35 major economies, and 6th out of 17
developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In the Netherlands’s case, our growth estimate comes from combining our expectation of a 1.4% growth rate per worker, which
is somewhat below the global average, and a labor force growth rate of -0.2%, which will moderately weigh on growth. The
growth in output per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters
most, while swings in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time
frame, we weigh our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no
precision here).

Over the next 10 years, we expect the Netherlands’s productivity growth to be somewhat worse than most major countries
(implying a growth rate of 1.5% on its own), and indebtedness conditions to be slightly worse than other countries (implying a
growth rate of 1.3% on its own). As shown below, the Netherlands’s biggest relative strengths are its level of innovation/commer-
cialism and its level of bureaucracy, and its biggest relative problems are its debt and debt service levels and how hard its people
work. The various gauges and weights are shown below. The individual indicators that are behind them are explained in the
appendix of this study. Please review this table to understand our comments.

NETHERLANDS—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.2% 24

Working-Age Population Growth -0.2% 21

Growth Per Worker Estimate 1.4% 23

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 26

What You Pay vs. What You Get 45% 32

Education 11% 32

Labor Productivity 11% 33

Working Hard 11% 34

Investing 11% 29

Culture 20% 12

Corruption 3% 8

Bureaucracy 3% 17

Rule of Law 3% 20

Savoring Life vs. Achieving 3% 26

Innovation 3% 3

Self Sufficiency 3% 21

Indebtedness 35% 24

Debt Levels and Flow 18% 20

Monetary Policy 18% 20

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

78
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Netherlands

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

The Netherlands offers much worse than average value, ranked 32nd of 35 countries we measure. Its workers are neither expen-
sive nor inexpensive, weighing the Netherlands’s low levels of education (according to tertiary education rates) and about average
quality of education (according to PISA test scores). Further, people in the Netherlands don’t work long hours relative to the
cost of their labor—the average person of working age works 18.1 hours per week (28th out of 35 countries, and 30th out of 35
countries after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year
change in the dependency ratio). Levels of saving and investing are somewhat low given the Netherlands’s high per capita income
levels, with investment at about 19% of GDP (19th out of 35 countries). The Netherlands’s capital stock per capita (its structures,
machinery, transportation equipment, software and intellectual property) is growing at a rate of 1.2% per year (vs. an average
of +1% across the developed world). Investment in the Netherlands is more productive than investment in other countries with
similar levels of economic development, ranked 5th out of 17 developed countries (measuring productivity as incremental growth
for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Dutch culture appears to be a somewhat better than average contributor to growth in coming years, ranked 12th among the
countries we measure. Note that our culture measures compare the Netherlands to countries of similar levels of economic devel-
opment. Starting with self-sufficiency, the Netherlands is rated pretty poorly on this measure, weighing that its workers have a
relatively weak work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of
government support is neutral (with government outlays of 45% of GDP and transfer payments to households of 17% of GDP),
and its labor markets are moderately flexible. The Netherlands also seems to value savoring a bit more than achieving—again,
its work ethic is relatively weak, and surveys suggest that its people don’t especially value accomplishment and achievement.
Furthermore, innovation and commercialism are very strong in the Netherlands relative to income. We see the country investing
heavily in research and innovation, and its outputs from innovation, including inventions and earnings, are very high. Finally,
relative to its income, the Netherlands has somewhat low bureaucracy and red tape, somewhat low corruption, and average rule
of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
The Netherlands’s indebtedness position is slightly worse than other countries, ranked 24th out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden
is around 267% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally a bit tight.

79
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF INDONESIA

This is our computer generated reading for Indonesia as of July 2024.

Based on the latest readings of key indicators, Indonesia is not a meaningful global power (in the bottom third of countries we
rank), though in ascent. As shown in the table below, the key strengths of Indonesia are its strong economic and financial
position, its cost-competitive labor (on a quality-adjusted basis), and its people’s self-sufficiency and strong work ethic. Its
weaknesses are its weak relative position in education, its bad reading on innovation and technology, its relative unimpor-
tance to global trade, and its corruption and inconsistent rule of law. The eight major measures of power are somewhat weak
today but have, in aggregate, risen over the last 20 years. In particular, Indonesia’s innovation and technology, its importance to
global trade, and its relative position in education are strengthening.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Indonesia, the big cycles look somewhat favorable, though we have a limited read.

Indonesia is in a highly favorable position in its economic and financial cycles, with a low debt burden and relatively high
expected real growth over the next 10 years (5.5% per year). In the last 3 years, real growth has been 4.9% per year, below our
longer-term expectations. Over the same time, the stock market in Indonesia has returned 18.9% above cash, somewhat above
the rest of the world (17.1%). Debt levels are low (79% of GDP across non-financial sectors). Breaking this down, government
debt levels are low (39% of GDP); household debt levels are low (16% of GDP); and non-financial corporate debt levels are low
(24% of GDP). The bulk (80%) of these debts are in its own currency, which mitigates its debt risks. Indonesia has slightly more
foreign debts than foreign assets (net international investment position is -19% of GDP).

At this time, we do not have a read on internal disorder for Indonesia because we lack sufficient reliable data. Wealth, income
and values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top
10% in Indonesia capture 17% and 45% of income (respectively the 9th and 10th highest share across major countries) and 30%
and 61% of wealth (both the 12th highest share across major countries). Over the last decade, incomes for the top 10% grew
44% while incomes for the bottom 60% grew 61%. The relatively high income growth for the bottom 60% reduces the risks from
inequality.

Looking in more detail at the eight key measures of power—Indonesia has the second cheapest labor among major coun-
tries. Adjusted for worker quality, labor is significantly cheaper than the global average.

We net this against its weak relative position in education, its bad reading on innovation and technology, and its relative
unimportance to global trade. With education—Indonesia has a moderate share of the world’s bachelor’s degrees (3%) and a
small share of the world’s doctorate degrees (2%). On years of education, Indonesia is poor—students have on average 8.5 years of
education vs 11.7 in the average major country. PISA scores, which measure the proficiency of 15-year-old students across coun-
tries, are bad—369 vs 479 in the average major country. With innovation and technology—a small share (less than 1%) of global
patent applications, a small share (less than 1%) of global R&D spending and a small share (less than 1%) of global researchers
are in Indonesia. Indonesia exports just 1% of global exports.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Indonesia scores high on our
happiness index (1.6z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores neutral on our health index (-0.4z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators).

80
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INDONESIA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.17 Rank: 18 Getting Better Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Highly Favorable 1.1 2 Getting Better Getting Better

Debt Burden Low Debt 0.7 3 Getting Better Getting Better

Expected Growth 5.5% 0.9 2 Flat Getting Better

Internal Order - - - - -

Wealth/Values Gap Narrow 0.6 7 Flat Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 1.6 2 Getting Better Getting Better

Reserve Currency Status Weak -0.7 9 - Flat

Military Weak -0.6 13 Flat Flat

Economic Output Weak -0.8 14 Flat Flat

Financial Center Weak -1.0 20 Flat Getting Better

Innovation and Technology Weak -1.2 21 Getting Better Getting Better

Trade Weak -1.2 22 Getting Better Getting Better

Education Very Weak -1.8 24 Getting Better Getting Better

Additional Measures of Power

Character/Determination/Civility Strong 1.4 4 Flat Flat

Geology Average 0.4 7 Getting Better Flat

Resource Allocation Efficiency Strong 0.5 8 Getting Better Getting Worse

Infrastructure & Investment Weak -0.5 14 Getting Better Getting Better

Governance/Rule of Law Weak -1.4 18 Flat Flat

Acts of Nature Very Weak -2.2 22 - Flat

Wellbeing

Happiness Gauge Good 1.6 2 - Flat

Health Gauge Moderate -0.4 22 - Flat

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Indonesia.

This computer-generated report is our best attempt to synthesize conditions in Indonesia. If anything
sounds off, we’d love your comments.

81
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INDONESIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Indonesia’s real growth rate over the next 10 years will be in the vicinity
of 5.5%. This growth rate is well above the global average, ranked 3rd out of 35 major economies, and 3rd out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Indonesia’s case, our growth estimate comes from combining our expectation of a 4.8% growth rate per worker, which is well
above the global average, and a labor force growth rate of 0.7%, which will boost growth. The growth in output per worker is
driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in indebted-
ness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our produc-
tivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Indonesia’s productivity growth to be much better than most major countries (implying a
growth rate of 5.0% on its own), and indebtedness conditions to be better than other countries (implying a growth rate of 4.4%
on its own). As shown below, Indonesia’s biggest relative strengths are its levels of investment and the value its workers provide
relative to education levels, and its biggest relative problems are its monetary policy and its reliance on credit flows for growth
(though compared to other countries it doesn’t rate especially poorly on these measures). The various gauges and weights are
shown below. The individual indicators that are behind them are explained in the appendix of this study. Please review this table
to understand our comments.

INDONESIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 5.5% 3

Working-Age Population Growth 0.7% 7

Growth Per Worker Estimate 4.8% 2

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 2

What You Pay vs. What You Get 45% 2

Education 11% 2

Labor Productivity 11% 3

Working Hard 11% 2

Investing 11% 2

Culture 20% 5

Corruption 3% 2

Bureaucracy 3% 6

Rule of Law 3% 10

Savoring Life vs. Achieving 3% 7

Innovation 3% 11

Self Sufficiency 3% 5

Indebtedness 35% 2

Debt Levels and Flow 18% 1

Monetary Policy 18% 7

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

82
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on Indonesia

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Indonesia offers much better than average value, ranked 2nd of 35 countries we measure. Its workers are somewhat inexpensive,
even taking into consideration Indonesia’s low levels of education (according to tertiary education rates) and very poor quality of
education (according to PISA test scores). Further, people in Indonesia work very long hours relative to the cost of their labor—
the average person of working age works 31.2 hours per week (6th out of 35 countries, and 2nd out of 35 countries after adjusting
for income), and the demographics of the workforce are favorable (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are high given Indonesia’s very low per capita income levels, with investment at about 23% of
GDP (6th out of 35 countries). Indonesia’s capital stock per capita (its structures, machinery, transportation equipment, software
and intellectual property) is growing at a rate of 1.2% per year (vs. an average of +1% across the emerging world). Investment in
Indonesia is about as productive as investment in other countries with similar levels of economic development, ranked 12th out
of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Indonesian culture appears to be a significant contributor to growth in coming years, ranked 5th among the countries we mea-
sure. Note that our culture measures compare Indonesia to countries of similar levels of economic development. Starting with
self-sufficiency, Indonesia is rated pretty well on this measure, weighing that its workers have a roughly average work ethic (con-
sidering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is low (with
government outlays of 18% of GDP and transfer payments to households of 3% of GDP), and its labor markets are very flexible.
Indonesia also seems to value savoring about the same as it values achieving—again, its work ethic is roughly average, but sur-
veys suggest that its people value accomplishment and achievement. Furthermore, innovation and commercialism are somewhat
strong in Indonesia relative to income. We see the country investing heavily in research and innovation, and its outputs from
innovation, including inventions and earnings, are about average. Finally, relative to its income, Indonesia has very low bureau-
cracy and red tape, very low corruption, and somewhat strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Indonesia’s indebtedness position is better than other countries, ranked 2nd out of the 35 countries we look at. Based on current
debt levels and debt service costs, the country has a moderate amount of room to lever up in the future. The total debt burden is
around 83% of GDP, compared to a global average of 236%. In the past few years, its growth was neither supported nor depressed
by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally neutral.

83
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF ITALY

This is our computer generated reading for Italy as of July 2024.

Based on the latest readings of key indicators, Italy is not a meaningful global power (in the bottom third of countries we rank)
in gradual decline, although over the last 3 years, its trajectory has been flat. As shown in the table below, the key weaknesses
of Italy that put it in this position are its unfavorable economic/financial position, its corruption and inconsistent rule of
law, its people’s lower than average work ethic and low self-sufficiency, and its relatively poor allocation of labor and cap-
ital. The eight major measures of power are somewhat weak today and have, in aggregate, fallen slowly over the last 20 years.
In particular, Italy’s share of global output, its importance to global trade, and its importance as a financial center are declining.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Italy, the big cycles look somewhat unfavorable, though we have a limited read.

Italy is in an unfavorable position in its economic and financial cycles, with a moderately high debt burden and very low
expected real growth over the next 10 years (-0.5% per year). In the last 3 years, real growth has been 3.5% per year, above
our longer-term expectations. Over the same time, the stock market in Italy has returned 47.0% above cash, meaningfully out-
performing the rest of the world (17.1%). Debt levels are high (231% of GDP across non-financial sectors). Breaking this down,
government debt levels are high (132% of GDP); household debt levels are low (38% of GDP); and non-financial corporate debt
levels are modest (61% of GDP). Italy’s debts are largely in euros, which increases Italy’s debt risks, since this is not a currency
that Italy directly controls. Italy has similar levels of foreign debts and foreign assets (net international investment position is
7% of GDP). The ability to use interest rate cuts to stimulate the economy is modest for the Eurozone (short rates are at 3.6%).

At this time, we do not have a read on internal disorder for Italy because we lack sufficient reliable data. Wealth, income and
values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10%
in Italy capture 13% and 38% of income (respectively the 13th and 14th highest share across major countries) and 22% and 56%
of wealth (respectively the 21st and 22nd highest share across major countries). Over the last decade, incomes for the top 10%
grew 12% while incomes for the bottom 60% grew 9%. The relatively low income growth for the bottom 60% increases the risks
from inequality.

On the eight key measures of power, Italy looks somewhat weak in aggregate. It has no particularly prominent strengths or
weaknesses that I will call out.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Italy scores modestly high on our
happiness index (0.8z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.2z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Italy is 84 compared to a global average of 75.

84
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

ITALY—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.17 Rank: 19 Getting Worse Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Unfavorable -1.1 20 Flat Flat

Debt Burden Moderately High Debt -0.5 18 Flat Flat

Expected Growth -0.5% -1.3 24 Flat Getting Worse

Internal Order - - - - -

Wealth/Values Gap Narrow 0.5 9 Flat Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Trade Weak -0.7 10 Getting Worse Getting Better

Military Weak -0.5 11 Flat Flat

Economic Output Weak -0.8 12 Getting Worse Getting Worse

Financial Center Weak -0.6 14 Flat Flat

Innovation and Technology Weak -0.8 15 Flat Getting Better

Education Weak -1.0 17 Flat Flat

Competitiveness Weak -0.6 19 Flat Getting Better

Reserve Currency Status - - - - -

Additional Measures of Power

Infrastructure & Investment Weak -0.7 18 Getting Worse Getting Better

Geology Weak -0.7 20 Flat Getting Worse

Governance/Rule of Law Very Weak -1.8 20 Getting Worse Flat

Resource Allocation Efficiency Very Weak -2.2 22 Getting Worse Getting Worse

Character/Determination/Civility Weak -1.4 23 Flat Getting Better

Acts of Nature Weak -1.0 17 - Getting Worse

Wellbeing

Happiness Gauge Moderate 0.8 15 - Flat

Health Gauge Excellent 2.2 8 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Italy.

This computer-generated report is our best attempt to synthesize conditions in Italy. If anything sounds
off, we’d love your comments.

85
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

ITALY’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Italy’s real growth rate over the next 10 years will be in the vicinity of
-0.5%. This growth rate is well below the global average, ranked 35th out of 35 major economies, and 17th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Italy’s case, our growth estimate comes from combining our expectation of a 0.6% growth rate per worker, which is well below
the global average, and a labor force growth rate of -1.1%, which will weigh on growth. The growth in output per worker is driven
significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in indebtedness
tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our productivity
measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Italy’s productivity growth to be much worse than most major countries (implying a growth
rate of 0.3% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of 1.1%
on its own). As shown below, Italy’s biggest relative strengths are its low reliance on credit flows for growth and the value its
workers provide relative to education levels (though compared to other countries it doesn’t rate especially well on these measures),
and its biggest relative problems are its debt and debt service levels and its shrinking workforce. The various gauges and weights
are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please review this
table to understand our comments.

ITALY—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate -0.5% 35

Working-Age Population Growth -1.1% 34

Growth Per Worker Estimate 0.6% 33

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 34

What You Pay vs. What You Get 45% 29

Education 11% 27

Labor Productivity 11% 24

Working Hard 11% 31

Investing 11% 24

Culture 20% 35

Corruption 3% 35

Bureaucracy 3% 33

Rule of Law 3% 35

Savoring Life vs. Achieving 3% 30

Innovation 3% 32

Self Sufficiency 3% 35

Indebtedness 35% 21

Debt Levels and Flow 18% 23

Monetary Policy 18% 19

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

86
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Italy

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Italy offers much worse than average value, ranked 29th of 35 countries we measure. Its workers are neither expensive nor inex-
pensive, weighing Italy’s low levels of education (according to tertiary education rates) and poor quality of education (according
to PISA test scores). Further, people in Italy don’t work long hours relative to the cost of their labor—the average person of
working age works 17.6 hours per week (30th out of 35 countries, and 29th out of 35 countries after adjusting for income), and
the demographics of the workforce are unfavorable (according to the projected 10-year change in the dependency ratio). Levels
of saving and investing are roughly average given Italy’s high per capita income levels, with investment at about 20% of GDP
(16th out of 35 countries). Italy’s capital stock per capita (its structures, machinery, transportation equipment, software and intel-
lectual property) is growing at a rate of 2.0% per year (vs. an average of +1% across the developed world). Investment in Italy is
more productive than investment in other countries with similar levels of economic development, ranked 7th out of 17 developed
countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Italian culture appears to be a much worse than average contributor to growth in coming years, ranked 35th among the countries
we measure. Note that our culture measures compare Italy to countries of similar levels of economic development. Starting with
self-sufficiency, Italy is rated very poorly on this measure, weighing that its workers have a relatively weak work ethic (considering
a variety of indicators including hours worked, retirement age, and vacations), its level of government support is very high (with
government outlays of 55% of GDP and transfer payments to households of 30% of GDP), and its labor markets are very rigid.
Italy also seems to value savoring much more than achieving—again, its work ethic is relatively weak, and surveys suggest that
its people don’t especially value accomplishment and achievement. Furthermore, innovation and commercialism are very weak
in Italy relative to income. We see the country investing lightly in research and innovation, and its outputs from innovation,
including inventions and earnings, are very low. Finally, relative to its income, Italy has somewhat high bureaucracy and red tape,
very high corruption, and very weak rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Italy’s indebtedness position is about average compared to other countries, ranked 21st out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 278% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally a bit tight.

87
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF SPAIN

This is our computer generated reading for Spain as of July 2024.

Based on the latest readings of key indicators, Spain is not a meaningful global power (in the bottom third of countries we
rank) on a flat trajectory. As shown in the table below, the key weaknesses of Spain that put it in this position are its unfa-
vorable economic/financial position, its relatively poor allocation of labor and capital, its people’s lower than average work
ethic and low self-sufficiency, and its bad reading on innovation and technology. The eight major measures of power are
somewhat weak today and have, in aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Spain, the big cycles look mixed.

Spain is in an unfavorable position in its economic and financial cycles, with a moderately high debt burden and very low
expected real growth over the next 10 years (0.3% per year). In the last 3 years, real growth has been 4.3% per year, above our
longer-term expectations. Over the same time, the stock market in Spain has returned 33.4% above cash, meaningfully outper-
forming the rest of the world (17.1%). Debt levels are high (237% of GDP across non-financial sectors). Breaking this down,
government debt levels are high (110% of GDP); household debt levels are low (47% of GDP); and non-financial corporate debt
levels are modest (79% of GDP). Spain’s debts are largely in euros, which increases Spain’s debt risks, since this is not a currency
that Spain directly controls. Spain has significantly more foreign debts than foreign assets (net international investment position is
-54% of GDP). The ability to use interest rate cuts to stimulate the economy is modest for the Eurozone (short rates are at 3.6%).

Internal disorder is a low risk. Wealth, income and values gaps are narrow (relative to countries of similar per capita income
levels). Regarding inequality—the top 1% and top 10% in Spain capture 11% and 33% of income (respectively the 19th and 21st
highest share across major countries) and 24% and 58% of wealth (both the 19th highest share across major countries). Our inter-
nal conflict gauge is average though getting better. This gauge measures actual conflict events (i.e., protests), political conflict
(i.e., partisanship), and general discontent (based on surveys).

Looking in more detail at the eight key measures of power, we would call out its bad reading on innovation and technology.
A small share (less than 1%) of global patent applications, a small share (1%) of global R&D spending and a small share (1%) of
global researchers are in Spain.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Spain scores modestly high on
our happiness index (0.8z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores high on our health index (2.3z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in Spain is 84 compared to a global average of 75.

88
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SPAIN—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.17 Rank: 20 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Unfavorable -1.1 22 Flat Flat

Debt Burden Moderately High Debt -0.9 21 Flat Getting Better

Expected Growth 0.3% -1.0 20 Getting Worse Getting Worse

Internal Order Low Risk 0.3 6 Getting Better Getting Better

Wealth/Values Gap Narrow 0.6 5 Getting Better Flat

Internal Conflict Average -0.1 7 Getting Better Getting Better

External Order - - - - -

Key Eight Measures of Power

Competitiveness Average -0.5 16 Flat Flat

Financial Center Weak -0.6 16 Flat Flat

Trade Weak -0.9 16 Flat Flat

Education Weak -0.9 16 Flat Flat

Economic Output Weak -1.0 16 Getting Worse Getting Worse

Military Weak -0.8 17 Flat Flat

Innovation and Technology Weak -0.9 17 Getting Worse Flat

Reserve Currency Status - - - - -

Additional Measures of Power

Infrastructure & Investment Weak -0.5 13 Getting Worse Getting Worse

Governance/Rule of Law Weak -0.7 15 Flat Getting Better

Geology Weak -0.5 16 Flat Getting Worse

Character/Determination/Civility Weak -1.0 21 Flat Flat

Resource Allocation Efficiency Weak -1.4 21 Getting Worse Getting Worse

Acts of Nature Weak -0.7 16 - Getting Worse

Wellbeing

Happiness Gauge Moderate 0.8 16 - Flat

Health Gauge Excellent 2.3 4 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Spain.

This computer-generated report is our best attempt to synthesize conditions in Spain. If anything sounds
off, we’d love your comments.

89
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SPAIN’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Spain’s real growth rate over the next 10 years will be in the vicinity of
0.3%. This growth rate is well below the global average, ranked 31st out of 35 major economies, and 13th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Spain’s case, our growth estimate comes from combining our expectation of a 1.0% growth rate per worker, which is some-
what below the global average, and a labor force growth rate of -0.7%, which will weigh on growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Spain’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 0.9% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 1.3% on its own). As shown below, Spain’s biggest relative strengths are its low reliance on credit flows for growth and its rule
of law (though compared to other countries it doesn’t rate especially well on these measures), and its biggest relative problems
are its debt and debt service levels and its shrinking workforce. The various gauges and weights are shown below. The individual
indicators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

SPAIN—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.3% 31

Working-Age Population Growth -0.7% 28

Growth Per Worker Estimate 1.0% 28

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 32

What You Pay vs. What You Get 45% 26

Education 11% 24

Labor Productivity 11% 23

Working Hard 11% 30

Investing 11% 23

Culture 20% 33

Corruption 3% 30

Bureaucracy 3% 32

Rule of Law 3% 22

Savoring Life vs. Achieving 3% 25

Innovation 3% 33

Self Sufficiency 3% 33

Indebtedness 35% 19

Debt Levels and Flow 18% 22

Monetary Policy 18% 18

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

90
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Spain

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Spain offers somewhat worse than average value, ranked 26th of 35 countries we measure. Its workers are neither expensive
nor inexpensive, weighing Spain’s somewhat low levels of education (according to tertiary education rates) and poor quality of
education (according to PISA test scores). Further, people in Spain don’t work long hours relative to the cost of their labor—the
average person of working age works 16.3 hours per week (34th out of 35 countries, and 31st out of 35 countries after adjusting
for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in the depen-
dency ratio). Levels of saving and investing are roughly average given Spain’s high per capita income levels, with investment at
about 18% of GDP (21st out of 35 countries). Spain’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 0.9% per year (vs. an average of +1% across the developed world).
Investment in Spain is more productive than investment in other countries with similar levels of economic development, ranked
8th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Spanish culture appears to be a much worse than average contributor to growth in coming years, ranked 33rd among the coun-
tries we measure. Note that our culture measures compare Spain to countries of similar levels of economic development. Starting
with self-sufficiency, Spain is rated very poorly on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is very
high (with government outlays of 48% of GDP and transfer payments to households of 27% of GDP), and its labor markets are
moderately rigid. Spain also seems to value savoring much more than achieving—again, its work ethic is relatively weak, and
surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commercialism
are very weak in Spain relative to income. We see the country investing lightly in research and innovation, and its outputs from
innovation, including inventions and earnings, are very low. Finally, relative to its income, Spain has average levels of bureau-
cracy and red tape, somewhat high corruption, and average rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Spain’s indebtedness position is about average compared to other countries, ranked 19th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 276% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
depressed by low credit creation, which is supportive for growth going forward. Lastly, the stance of monetary policy is generally
a bit tight.

91
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF SAUDI ARABIA

This is our computer generated reading for Saudi Arabia as of July 2024.

Based on the latest readings of key indicators, Saudi Arabia is not a meaningful global power (in the bottom third of coun-
tries we rank) on a flat trajectory. As shown in the table below, the key strengths of Saudi Arabia are its strong economic
and financial position and its people’s self-sufficiency and strong work ethic. Its weaknesses are its weak relative position
in education, its bad reading on innovation and technology, its relatively small economy, and its relative unimportance to
global trade. The eight major measures of power are somewhat weak today and have, in aggregate, moved sideways over the last
20 years. Note that Saudi Arabia generally scores well on our measures of quality but less well on quantity given its small size.
You can see more detail on our per capita scores at the end of the overall report.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Saudi Arabia, the big cycles look somewhat favorable, though we have a limited read.

Saudi Arabia is in a highly favorable position in its economic and financial cycles, with a low debt burden and relatively high
expected real growth over the next 10 years (4.6% per year). In the last 3 years, real growth has been 3.3% per year, below our
longer-term expectations. Over the same time, the stock market in Saudi Arabia has returned 3.8% above cash, meaningfully
underperforming the rest of the world (17.1%). Debt levels are low (102% of GDP across non-financial sectors). Breaking this
down, government debt levels are low (27% of GDP), which we net against 143% of GDP in sovereign wealth and FX reserves;
household debt levels are low (32% of GDP); and non-financial corporate debt levels are low (43% of GDP). The bulk (89%) of
these debts are in its own currency, which mitigates its debt risks. Saudi Arabia has significantly more foreign assets than foreign
debts (net international investment position is 73% of GDP).

At this time, we do not have a read on internal disorder for Saudi Arabia because we lack sufficient reliable data. Wealth, income
and values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10%
in Saudi Arabia capture 21% and 54% of income (respectively the 4th and 5th highest share across major countries) and 40% and
73% of wealth (both the 5th highest share across major countries).

Looking in more detail at the eight key measures of power, we would call out its weak relative position in education, its bad
reading on innovation and technology, and its relatively small economy. With education—Saudi Arabia has a small share of
the world’s bachelor’s degrees (less than 1%) and a small share of the world’s doctorate degrees (less than 1%). On years of edu-
cation, Saudi Arabia is around average—students have on average 10.6 years of education vs 11.7 in the average major country.
With innovation and technology—a small share (less than 1%) of global patent applications, a small share (less than 1%) of
global R&D spending and a small share (less than 1%) of global researchers are in Saudi Arabia. On technology, only 0.2% of
the world’s technology companies by value are listed in Saudi Arabia even though it comprises 2.4% of the total global equity
market cap.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Saudi Arabia scores modestly
high on our happiness index (0.5z, which measures survey responses like the share of people that reported being happy in the
country and other indications of societal satisfaction like low suicide rates) and scores modestly high on our health index (1.1z,
which measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the
life expectancy at birth (in years) in Saudi Arabia is 78 compared to a global average of 75.

92
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SAUDI ARABIA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.15 Rank: 21 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Highly Favorable 1.5 1 - Getting Worse

Debt Burden Low Debt 1.7 1 - Getting Worse

Expected Growth 4.6% 0.5 3 - Getting Worse

Internal Order - - - - -

Wealth/Values Gap Large -2.9 24 Getting Better Getting Better

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Average 0.5 10 - Getting Better

Reserve Currency Status Weak -0.7 11 - Flat

Military Weak -0.7 14 Getting Better Flat

Financial Center Weak -0.8 18 Getting Better Getting Better

Economic Output Weak -1.2 18 Flat Flat

Education Weak -1.2 18 Getting Better Flat

Trade Weak -1.1 19 Flat Getting Better

Innovation and Technology Weak -1.2 22 Getting Better Getting Better

Additional Measures of Power

Character/Determination/Civility Very Strong 2.3 2 Getting Better Getting Better

Geology Average 0.3 8 Flat Getting Worse

Governance/Rule of Law Average 0.5 10 Getting Better Getting Better

Infrastructure & Investment Weak -0.6 15 Getting Better Getting Better

Resource Allocation Efficiency Average 0.2 23 Getting Better Getting Better

Acts of Nature Very Weak -1.8 19 - Getting Better

Wellbeing

Happiness Gauge Moderate 0.5 18 - Flat

Health Gauge Good 1.1 16 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Saudi Arabia.

This computer-generated report is our best attempt to synthesize conditions in Saudi Arabia. If any-
thing sounds off, we’d love your comments.

93
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SAUDI ARABIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Saudi Arabia’s real growth rate over the next 10 years will be in the vicinity
of 4.6%. This growth rate is well above the global average, ranked 4th out of 35 major economies, and 4th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars). Please note that Saudi Arabia is a large net exporter of commodities (net commodity exports
are ~19% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have a view on the long-term
growth in commodity exports.

In Saudi Arabia’s case, our growth estimate comes from combining our expectation of a 3.0% growth rate per worker, which is
somewhat above the global average, and a labor force growth rate of 1.6%, which will boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Saudi Arabia’s productivity growth to be somewhat better than most major countries (implying
a growth rate of 3.3% on its own), and indebtedness conditions to be slightly better than other countries (implying a growth rate
of 1.8% on its own). As shown below, Saudi Arabia’s biggest relative strengths are its debt and debt service levels and its growing
workforce, and its biggest relative problems are its monetary policy and its level of innovation/commercialism. The various gauges
and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please
review this table to understand our comments.

SAUDI ARABIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 4.6% 4

Working-Age Population Growth 1.6% 1

Growth Per Worker Estimate 3.0% 8

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 10

What You Pay vs. What You Get 45% 12

Education 11% 18

Labor Productivity 11% 10

Working Hard 11% 7

Investing 11% 10

Culture 20% 8

Corruption 3% 22

Bureaucracy 3% 7

Rule of Law 3% 4

Savoring Life vs. Achieving 3% 3

Innovation 3% 34

Self Sufficiency 3% 3

Indebtedness 35% 5

Debt Levels and Flow 18% 4

Monetary Policy 18% 23

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
94
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Saudi Arabia

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Saudi Arabia offers somewhat better than average value, ranked 12th of 35 countries we measure. Its workers are somewhat
inexpensive, even taking into consideration Saudi Arabia’s low levels of education (according to tertiary education rates) and very
poor quality of education (according to PISA test scores). Further, people in Saudi Arabia work very long hours relative to the
cost of their labor—the average person of working age works 34.5 hours per week (2nd out of 35 countries, and 6th out of 35
countries after adjusting for income), although the demographics of the workforce are about average (according to the projected
10-year change in the dependency ratio). Levels of saving and investing are roughly average given Saudi Arabia’s high per capita
income levels, with investment at about 22% of GDP (9th out of 35 countries). Saudi Arabia’s capital stock per capita (its struc-
tures, machinery, transportation equipment, software and intellectual property) is shrinking at a rate of -0.9% per year (vs. an
average of +1% across the emerging world). Investment in Saudi Arabia is more productive than investment in other countries
with similar levels of economic development, ranked 9th out of 18 emerging countries (measuring productivity as incremental
growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Saudi Arabian culture appears to be a somewhat better than average contributor to growth in coming years, ranked 8th among
the countries we measure. Note that our culture measures compare Saudi Arabia to countries of similar levels of economic
development. Starting with self-sufficiency, Saudi Arabia is rated very well on this measure, weighing that its workers have a
somewhat strong work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level
of government support is low (with government outlays of 33% of GDP and transfer payments to households of 3% of GDP), and
its labor markets are very flexible. Saudi Arabia also seems to value achieving much more than savoring—again, its work ethic is
somewhat strong, but it lacks the survey data our measures use to triangulate this view. Furthermore, innovation and commer-
cialism are very weak in Saudi Arabia relative to income. We see the country investing very lightly in research and innovation,
and its outputs from innovation, including inventions and earnings, are very low. Finally, relative to its income, Saudi Arabia
has very low bureaucracy and red tape, average levels of corruption, and very strong rule of law, according to the international
measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Saudi Arabia’s indebtedness position is better than other countries, ranked 5th out of the 35 countries we look at. However,
we put less stock in our assessment of Saudi Arabia’s indebtedness given its significant stock of assets (e.g., FX reserves and/or
sovereign wealth fund assets) that are not considered in this measurement. In the past few years, its growth was supported by
high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally a bit tight.

95
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF MEXICO

This is our computer generated reading for Mexico as of July 2024.

Based on the latest readings of key indicators, Mexico is not a meaningful global power (in the bottom third of countries we
rank) on a flat trajectory. As shown in the table below, the key strength of Mexico is its people’s self-sufficiency and strong
work ethic. Its weaknesses are its relative unimportance as a global financial center, its weak relative position in education,
its bad reading on innovation and technology, its relatively weak military, its corruption and inconsistent rule of law, and its
poor infrastructure and low investment. The eight major measures of power are somewhat weak today and have, in aggregate,
moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Mexico, the big cycles look mixed.

Mexico is in a somewhat favorable position in its economic and financial cycles, with a low debt burden and moderate
expected real growth over the next 10 years (2.5% per year). In the last 3 years, real growth has been 2.9% per year, above our
longer-term expectations. Over the same time, the stock market in Mexico has returned -9.4% below cash, meaningfully under-
performing the rest of the world (17.1%). Debt levels are low (76% of GDP across non-financial sectors). Breaking this down,
government debt levels are low (40% of GDP); household debt levels are low (16% of GDP); and non-financial corporate debt
levels are low (20% of GDP). The bulk (86%) of these debts are in its own currency, which mitigates its debt risks. Mexico has
modestly more foreign debts than foreign assets (net international investment position is -39% of GDP).

At this time, we do not have a read on internal disorder for Mexico because we lack sufficient reliable data. Wealth, income and
values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top 10% in
Mexico capture 28% and 65% of income (respectively the 1th and 2th highest share across major countries) and 47% and 79% of
wealth (respectively the 4th and 3th highest share across major countries). Over the last decade, incomes for the top 10% grew
-1% while incomes for the bottom 60% grew 31%. The relatively high income growth for the bottom 60% reduces the risks from
inequality.

Looking in more detail at the eight key measures of power, we would call out its relative unimportance as a global financial
center, its weak relative position in education, and its bad reading on innovation and technology, among other weaknesses
laid out in the table below. Mexico’s equity markets are a small share of the world total (less than 1% of free-float market cap
and less than 1% of volume), and a small share of global transactions happen in MXN (less than 1%). With education—Mexico
has a moderate share of the world’s bachelor’s degrees (4%) and a small share of the world’s doctorate degrees (less than 1%). On
years of education, Mexico is poor—students have on average 9.6 years of education vs 11.7 in the average major country. PISA
scores, which measure the proficiency of 15-year-old students across countries, are bad—407 vs 479 in the average major country.
With innovation and technology—a small share (less than 1%) of global patent applications, a small share (less than 1%) of global
R&D spending and a small share (less than 1%) of global researchers are in Mexico.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Mexico scores modestly high
on our happiness index (1.4z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores neutral on our health index (0.0z, which measures
factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the share of the
population reported happy in Mexico is 92% compared to a global average of 88%.

96
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

MEXICO—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.14 Rank: 22 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.1 6 Flat Flat

Debt Burden Low Debt 0.4 6 Flat Getting Better

Expected Growth 2.5% -0.2 9 Getting Worse Getting Worse

Internal Order - - - - -

Wealth/Values Gap Large -2.4 22 Getting Better Getting Better

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 0.7 8 Getting Better Getting Worse

Economic Output Weak -0.8 13 Getting Worse Getting Worse

Trade Weak -0.8 15 Getting Better Getting Better

Reserve Currency Status Weak -0.7 17 - Flat

Education Weak -1.5 20 Flat Flat

Financial Center Weak -1.1 21 Getting Worse Flat

Military Weak -1.1 21 - Flat

Innovation and Technology Weak -1.3 24 Flat Getting Worse

Additional Measures of Power

Character/Determination/Civility Strong 1.6 3 Getting Worse Getting Better

Geology Average -0.3 11 Flat Flat

Resource Allocation Efficiency Average -0.4 14 Getting Worse Getting Worse

Infrastructure & Investment Weak -1.1 22 Getting Better Flat

Governance/Rule of Law Very Weak -2.3 22 Getting Worse Getting Worse

Acts of Nature Weak -1.2 18 - Getting Worse

Wellbeing

Happiness Gauge Good 1.4 4 - Flat

Health Gauge Moderate 0.0 21 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Mexico.

This computer-generated report is our best attempt to synthesize conditions in Mexico. If anything
sounds off, we’d love your comments.

97
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

MEXICO’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Mexico’s real growth rate over the next 10 years will be in the vicinity
of 2.5%. This growth rate is somewhat above the global average, ranked 12th out of 35 major economies, and 12th out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Mexico’s case, our growth estimate comes from combining our expectation of a 1.7% growth rate per worker, which is
roughly in line with the global average, and a labor force growth rate of 0.8%, which will boost growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Mexico’s productivity growth to be somewhat better than most major countries (implying a
growth rate of 1.9% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 1.4% on its own). As shown below, Mexico’s biggest relative strengths are the value its workers provide relative to educa-
tion levels and its debt and debt service levels, and its biggest relative problems are its monetary policy and its level of innovation/
commercialism. The various gauges and weights are shown below. The individual indicators that are behind them are explained
in the appendix of this study. Please review this table to understand our comments.

MEXICO—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.5% 12

Working-Age Population Growth 0.8% 5

Growth Per Worker Estimate 1.7% 20

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 13

What You Pay vs. What You Get 45% 10

Education 11% 6

Labor Productivity 11% 11

Working Hard 11% 3

Investing 11% 16

Culture 20% 24

Corruption 3% 33

Bureaucracy 3% 26

Rule of Law 3% 27

Savoring Life vs. Achieving 3% 8

Innovation 3% 35

Self Sufficiency 3% 4

Indebtedness 35% 9

Debt Levels and Flow 18% 2

Monetary Policy 18% 33

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

98
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Mexico

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Mexico offers somewhat better than average value, ranked 10th of 35 countries we measure. Its workers are somewhat inex-
pensive, even taking into consideration Mexico’s low levels of education (according to tertiary education rates) and very poor
quality of education (according to PISA test scores). Further, people in Mexico work very long hours relative to the cost of their
labor—the average person of working age works 32.0 hours per week (5th out of 35 countries, and 4th out of 35 countries after
adjusting for income), although the demographics of the workforce are about average (according to the projected 10-year change
in the dependency ratio). Levels of saving and investing are roughly average given Mexico’s low per capita income levels, with
investment at about 16% of GDP (25th out of 35 countries). Mexico’s capital stock per capita (its structures, machinery, trans-
portation equipment, software and intellectual property) is growing at a relatively slow rate of 0.8% per year (vs. an average of
+1% across the emerging world). Investment in Mexico is less productive than investment in other countries with similar levels
of economic development, ranked 17th out of 18 emerging countries (measuring productivity as incremental growth for each
additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Mexican culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 24th among the
countries we measure. Note that our culture measures compare Mexico to countries of similar levels of economic development.
Starting with self-sufficiency, Mexico is rated pretty well on this measure, weighing that its workers have a roughly average work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is low (with government outlays of 28% of GDP and transfer payments to households of 7% of GDP), and its labor markets are
very flexible. Mexico also seems to value savoring about the same as it values achieving—again, its work ethic is roughly average,
but surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commer-
cialism are very weak in Mexico relative to income. We see the country investing very lightly in research and innovation, and its
outputs from innovation, including inventions and earnings, are very low. Finally, relative to its income, Mexico has somewhat
low bureaucracy and red tape, somewhat high corruption, and average rule of law, according to the international measures we
are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Mexico’s indebtedness position is slightly better than other countries, ranked 9th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has a moderate amount of room to lever up in the future. The total debt
burden is around 107% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its
growth was neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of
monetary policy is generally tight.

99
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF SOUTH AFRICA

This is our computer generated reading for South Africa as of July 2024.

Based on the latest readings of key indicators, South Africa is not a meaningful global power (in the bottom third of countries
we rank) on a flat trajectory. As shown in the table below, the key weaknesses of South Africa that put it in this position
are its weak relative position in education, its bad reading on innovation and technology, its relatively weak military, its
relatively small economy, its relative unimportance to global trade, its corruption and inconsistent rule of law, and its poor
infrastructure and low investment. The eight major measures of power are somewhat weak today and have, in aggregate, moved
sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For South Africa, the big cycles look mixed.

South Africa is in a somewhat favorable position in its economic and financial cycles, with a moderately low debt burden and
moderate expected real growth over the next 10 years (2.9% per year). In the last 3 years, real growth has been 1.3% per year,
below our longer-term expectations. Over the same time, the stock market in South Africa has returned 16.3% above cash, some-
what below the rest of the world (17.1%). Debt levels are modest (141% of GDP across non-financial sectors). Breaking this down,
government debt levels are modest (75% of GDP); household debt levels are low (34% of GDP); and non-financial corporate debt
levels are low (32% of GDP). The bulk (88%) of these debts are in its own currency, which mitigates its debt risks. South Africa
has modestly more foreign assets than foreign debts (net international investment position is 28% of GDP).

At this time, we do not have a read on internal disorder for South Africa because we lack sufficient reliable data. Wealth, income
and values gaps are large (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and top
10% in South Africa capture 19% and 65% of income (respectively the 8th and highest share across major countries) and 55% and
86% of wealth (both the 1st highest share across major countries). Over the last decade, incomes for the top 10% grew 5% while
incomes for the bottom 60% grew 8%. The relatively low income growth for the bottom 60% increases the risks from inequality.

Looking in more detail at the eight key measures of power, we would call out its weak relative position in education, its bad
reading on innovation and technology, and its relatively weak military, among other weaknesses laid out in the table below.
With education—South Africa has a small share of the world’s bachelor’s degrees (less than 1%) and a small share of the world’s
doctorate degrees (less than 1%). On years of education, South Africa is poor—students have on average 9.4 years of education vs
11.7 in the average major country. With innovation and technology—a small share (less than 1%) of global patent applications,
a small share (less than 1%) of global R&D spending and a small share (less than 1%) of global researchers are in South Africa.
A small share (less than 1%) of global military spending is by South Africa, and it has a small share (less than 1%) of the world’s
military personnel.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. South Africa scores neutral on
our happiness index (0.1z, which measures survey responses like the share of people that reported being happy in the country and
other indications of societal satisfaction like low suicide rates) and scores low on our health index (-1.7z, which measures factors
like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the life expectancy at birth
(in years) in South Africa is 62 compared to a global average of 75.

100
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SOUTH AFRICA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.10 Rank: 23 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Somewhat Favorable 0.1 9 Getting Worse Getting Better

Debt Burden Moderately Low Debt 0.2 9 Flat Getting Better

Expected Growth 2.9% -0.1 6 Getting Worse Getting Better

Internal Order - - - - -

Wealth/Values Gap Large -2.7 23 Getting Better Getting Better

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 0.8 6 Getting Better Getting Better

Reserve Currency Status Weak -0.7 12 - Flat

Financial Center Weak -0.8 19 Getting Worse Flat

Economic Output Weak -1.2 19 Flat Flat

Education Weak -1.7 21 Flat Flat

Military Weak -1.2 22 Flat Flat

Innovation and Technology Weak -1.2 23 Flat Flat

Trade Weak -1.3 23 Flat Flat

Additional Measures of Power

Geology Average -0.2 10 Getting Worse Flat

Resource Allocation Efficiency Weak -0.6 17 Getting Worse Getting Worse

Character/Determination/Civility Weak -0.5 19 - Getting Worse

Governance/Rule of Law Weak -1.5 19 Getting Worse Getting Worse

Infrastructure & Investment Weak -1.0 20 Flat Getting Worse

Acts of Nature Very Weak -2.1 21 - Getting Worse

Wellbeing

Happiness Gauge Moderate 0.1 20 - Flat

Health Gauge Very Low -1.7 24 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for South Africa.

This computer-generated report is our best attempt to synthesize conditions in South Africa. If any-
thing sounds off, we’d love your comments.

101
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SOUTH AFRICA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that South Africa’s real growth rate over the next 10 years will be in the vicin-
ity of 2.9%. This growth rate is somewhat above the global average, ranked 8th out of 35 major economies, and 8th out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars). Please note that South Africa is a large net exporter of commodities (net commodity
exports are ~12% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have a view on the
long-term growth in commodity exports.

In South Africa’s case, our growth estimate comes from combining our expectation of a 1.9% growth rate per worker, which is
roughly in line with the global average, and a labor force growth rate of 1.0%, which will boost growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect South Africa’s productivity growth to be somewhat better than most major countries (imply-
ing a growth rate of 2.2% on its own), and indebtedness conditions to be about average compared to other countries (implying
a growth rate of 1.0% on its own). As shown below, South Africa’s biggest relative strengths are the value its workers provide
relative to education levels and its growing workforce, and its biggest relative problems are its debt and debt service levels and
how hard its people work. The various gauges and weights are shown below. The individual indicators that are behind them are
explained in the appendix of this study. Please review this table to understand our comments.

SOUTH AFRICA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.9% 8

Working-Age Population Growth 1.0% 2

Growth Per Worker Estimate 1.9% 17

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 11

What You Pay vs. What You Get 45% 7

Education 11% -

Labor Productivity 11% 6

Working Hard 11% 13

Investing 11% 4

Culture 20% 21

Corruption 3% 13

Bureaucracy 3% 14

Rule of Law 3% 6

Savoring Life vs. Achieving 3% 27

Innovation 3% 28

Self Sufficiency 3% 26

Indebtedness 35% 8

Debt Levels and Flow 18% 11

Monetary Policy 18% 6

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
102
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the South Africa

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

South Africa offers much better than average value, ranked 7th of 35 countries we measure. Its workers are somewhat inexpen-
sive, even taking into consideration South Africa’s low levels of education (according to tertiary education rates).Further, people
in South Africa work an average number of hours relative to the cost of their labor—the average person of working age works
17.6 hours per week (31st out of 35 countries, and 17th out of 35 countries after adjusting for income), although the demographics
of the workforce are about average (according to the projected 10-year change in the dependency ratio). Levels of saving and
investing are somewhat high given South Africa’s very low per capita income levels, with investment at about 14% of GDP (32nd
out of 35 countries). South Africa’s capital stock per capita (its structures, machinery, transportation equipment, software and
intellectual property) is shrinking at a rate of -0.8% per year (vs. an average of +1% across the emerging world). Investment in
South Africa is more productive than investment in other countries with similar levels of economic development, ranked 1st out
of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

South African culture appears to be an around average contributor to growth in coming years, ranked 21st among the countries
we measure. Note that our culture measures compare South Africa to countries of similar levels of economic development. Start-
ing with self-sufficiency, South Africa is rated pretty poorly on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is neutral (with government outlays of 33% of GDP and transfer payments to households of 6% of GDP), and its labor
markets are neither rigid nor flexible. South Africa also seems to value savoring much more than achieving—again, its work ethic
is relatively weak, but surveys suggest that its people moderately value accomplishment and achievement. Furthermore, inno-
vation and commercialism are somewhat weak in South Africa relative to income. We see the country investing very lightly in
research and innovation, and its outputs from innovation, including inventions and earnings, are about average. Finally, relative
to its income, South Africa has somewhat low bureaucracy and red tape, average levels of corruption, and somewhat strong rule
of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
South Africa’s indebtedness position is slightly better than other countries, ranked 8th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has little room to lever up in the future. The total debt burden is around
179% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither
supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is
generally neutral.

103
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE POWERS AND PROSPECTS OF ARGENTINA

This is our computer generated reading for Argentina as of July 2024.

Based on the latest readings of key indicators, Argentina is not a meaningful global power (in the bottom third of countries
we rank) on a flat trajectory. As shown in the table below, the key weaknesses of Argentina that put it in this position are its
relative unimportance as a global financial center, its weak relative position in education, its bad reading on innovation and
technology, its relatively weak military, its relatively small economy, its relative unimportance to global trade, its corruption
and inconsistent rule of law, its poor infrastructure and low investment, and its relatively poor allocation of labor and capi-
tal. The eight major measures of power are somewhat weak today and have, in aggregate, moved sideways over the last 20 years.

The table on the next page shows our aggregate country power gauge and the major drivers, the rank of each measure of power
across 24 major countries today, as well as the trajectory over the past three and twenty years.

To understand a country, we start by looking at the big cycles, as well as measures of power that both reflect and drive the rise
and fall of a country. While we refer to these factors individually, they are not separate; they interact with and reinforce one
another to move a country along its cycle.

For Argentina, the big cycles look somewhat unfavorable, though we have a limited read.

Argentina is in a moderately unfavorable position in its economic and financial cycles, with a moderately high debt burden
and moderate expected real growth over the next 10 years (2.0% per year). In the last 3 years, real growth has been 2.4% per
year, above our longer-term expectations. Over the same time, the stock market in Argentina has returned 7.1% above cash,
underperforming the rest of the world (17.1%). Debt levels are low (138% of GDP across non-financial sectors). Breaking this
down, government debt levels are high (118% of GDP); household debt levels are low (3% of GDP); and non-financial corporate
debt levels are low (17% of GDP). The bulk (85%) of these debts are in its own currency, which mitigates its debt risks. Argentina
has modestly more foreign assets than foreign debts (net international investment position is 28% of GDP).

At this time, we do not have a read on internal disorder for Argentina because we lack sufficient reliable data. Wealth, income
and values gaps are narrow (relative to countries of similar per capita income levels). Regarding inequality—the top 1% and
top 10% in Argentina capture 13% and 45% of income (respectively the 11th and 9th highest share across major countries) and
25% and 59% of wealth (both the 16th highest share across major countries). Over the last decade, incomes for the top 10%
grew -2% while incomes for the bottom 60% grew -2%. The relatively low income growth for the bottom 60% increases the
risks from inequality.

Looking in more detail at the eight key measures of power, we would call out its relative unimportance as a global financial
center, its weak relative position in education, and its bad reading on innovation and technology, among other weaknesses
laid out in the table below. Argentina’s equity markets are a small share of the world total (less than 1% of free-float market cap
and less than 1% of volume), and a small share of global transactions happen in ARS (less than 1%). With education—Argentina
has a small share of the world’s bachelor’s degrees (less than 1%) and a small share of the world’s doctorate degrees (less than 1%).
On years of education, Argentina is poor—students have on average 9.3 years of education vs 11.7 in the average major country.
PISA scores, which measure the proficiency of 15-year-old students across countries, are poor—395 vs 479 in the average major
country. With innovation and technology—a small share (less than 1%) of global patent applications, a small share (less than 1%)
of global R&D spending and a small share (less than 1%) of global researchers are in Argentina.

Finally, we also assess broader wellbeing by looking at measures of happiness and health/safety. Argentina scores modestly high
on our happiness index (0.9z, which measures survey responses like the share of people that reported being happy in the country
and other indications of societal satisfaction like low suicide rates) and scores modestly high on our health index (0.9z, which
measures factors like life expectancy, exposure to pollution, and homicide rates among other indicators). For example, the share
of the population using safely managed drinking water services in Argentina is 99% compared to a global average of 93%.

104
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

ARGENTINA—KEY DRIVERS OF OUR COUNTRY POWER SCORE

Overall Strength Gauge (0–1) Level: 0.07 Rank: 24 Flat Flat

The Big Cycles Level Z-Score Rank 20y Trajectory 3y Trajectory

Economic/Financial Position Moderately Unfavorable -0.7 17 Getting Worse Getting Better

Debt Burden Moderately High Debt -0.8 19 Getting Worse Getting Better

Expected Growth 2.0% -0.4 11 Flat Getting Better

Internal Order - - - - -

Wealth/Values Gap Narrow 0.6 8 Getting Better Flat

Internal Conflict - - - - -

External Order - - - - -

Key Eight Measures of Power

Competitiveness Strong 0.6 9 Getting Better Flat

Reserve Currency Status Weak -0.7 13 - Flat

Military Weak -1.0 19 Flat Flat

Innovation and Technology Weak -1.2 20 Getting Worse Getting Worse

Economic Output Weak -1.2 20 Flat Flat

Education Very Weak -1.8 22 Flat Flat

Financial Center Weak -1.2 23 Getting Worse Getting Worse

Trade Weak -1.3 24 Flat Flat

Additional Measures of Power

Geology Average -0.3 12 Getting Worse Getting Worse

Character/Determination/Civility Average -0.2 15 Flat Flat

Infrastructure & Investment Weak -1.5 24 Flat Getting Worse

Resource Allocation Efficiency Very Weak -2.2 24 Flat Getting Worse

Governance/Rule of Law Very Weak -2.4 24 Getting Worse Getting Worse

Acts of Nature Very Weak -2.1 20 - Getting Worse

Wellbeing

Happiness Gauge Moderate 0.9 12 - Flat

Health Gauge Moderate 0.9 17 - Getting Better

Note: All ranks shown are out of 24, except in the case of Internal Conflict & Internal Order (out of 10) and Reserve Currency Status (out of 19).

The next page goes into more detail on how we are getting to our read on future growth for Argentina.

This computer-generated report is our best attempt to synthesize conditions in Argentina. If anything
sounds off, we’d love your comments.

105
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

ARGENTINA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Argentina’s real growth rate over the next 10 years will be in the vicinity
of 2.0%. This growth rate is roughly at the global average, ranked 16th out of 35 major economies, and 14th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Argentina’s case, our growth estimate comes from combining our expectation of a 1.2% growth rate per worker, which is
somewhat below the global average, and a labor force growth rate of 0.8%, which will boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Argentina’s productivity growth to be about average compared to most major countries (imply-
ing a growth rate of 2.1% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth
rate of -0.6% on its own). As shown below, Argentina’s biggest relative strengths are the value its workers provide relative to
education levels and its growing workforce, and its biggest relative problems are its monetary policy and its debt and debt service
levels. The various gauges and weights are shown below. The individual indicators that are behind them are explained in the
appendix of this study. Please review this table to understand our comments.

ARGENTINA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.0% 16

Working-Age Population Growth 0.8% 4

Growth Per Worker Estimate 1.2% 25

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 16

What You Pay vs. What You Get 45% 11

Education 11% 8

Labor Productivity 11% 12

Working Hard 11% 6

Investing 11% 18

Culture 20% 29

Corruption 3% 23

Bureaucracy 3% 31

Rule of Law 3% 30

Savoring Life vs. Achieving 3% 29

Innovation 3% 29

Self Sufficiency 3% 17

Indebtedness 35% 29

Debt Levels and Flow 18% 12

Monetary Policy 18% 35

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

106
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Argentina

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Argentina offers somewhat better than average value, ranked 11th of 35 countries we measure. Its workers are somewhat inex-
pensive, even taking into consideration Argentina’s low levels of education (according to tertiary education rates) and very poor
quality of education (according to PISA test scores). Further, people in Argentina work long hours relative to the cost of their
labor—the average person of working age works 23.9 hours per week (14th out of 35 countries, and 10th out of 35 countries
after adjusting for income), and the demographics of the workforce are favorable (according to the projected 10-year change in
the dependency ratio). Levels of saving and investing are roughly average given Argentina’s low per capita income levels, with
investment at about 10% of GDP (34th out of 35 countries). Argentina’s capital stock per capita (its structures, machinery,
transportation equipment, software and intellectual property) is growing at a relatively slow rate of 0.4% per year (vs. an average
of +1% across the emerging world). Investment in Argentina is less productive than investment in other countries with similar
levels of economic development, ranked 18th out of 18 emerging countries (measuring productivity as incremental growth for
each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Argentine culture appears to be a much worse than average contributor to growth in coming years, ranked 29th among the
countries we measure. Note that our culture measures compare Argentina to countries of similar levels of economic development.
Starting with self-sufficiency, Argentina is rated pretty poorly on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is neutral (with government outlays of 38% of GDP and transfer payments to households of 11% of GDP), and its labor
markets are neither rigid nor flexible. Argentina also seems to value savoring much more than achieving—again, its work ethic is
relatively weak, and surveys suggest that its people don’t value accomplishment and achievement. Furthermore, innovation and
commercialism are somewhat weak in Argentina relative to income. We see the country investing neither lightly nor heavily in
research and innovation, and its outputs from innovation, including inventions and earnings, are very low. Finally, relative to its
income, Argentina has average levels of bureaucracy and red tape, average levels of corruption, and somewhat weak rule of law,
according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Argentina’s indebtedness position is worse than other countries, ranked 29th out of the 35 countries we look at. Based on current
debt levels and debt service costs, the country has little room to lever up in the future. In the past few years, its growth was sup-
ported by high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally tight.

107
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE UNITED ARAB EMIRATES’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that the United Arab Emirates’s real growth rate over the next 10 years will be in
the vicinity of 5.5%. This growth rate is well above the global average, ranked 2nd out of 35 major economies, and 2nd out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars). Please note that the United Arab Emirates is a very large net exporter of commodities
(net commodity exports are ~36% of GDP). Our growth estimate is on the non-commodity part of the economy. We do not have
a view on the long-term growth in commodity exports.

In the United Arab Emirates’s case, our growth estimate comes from combining our expectation of a 4.8% growth rate per worker,
which is well above the global average, and a labor force growth rate of 0.8%, which will boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in
indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect the United Arab Emirates’s productivity growth to be much better than most major countries
(implying a growth rate of 4.2% on its own), and indebtedness conditions to be better than other countries (implying a growth
rate of 5.2% on its own). As shown below, the United Arab Emirates’s biggest relative strengths are its level of self-sufficiency
and how its people value savoring life versus achieving, and its biggest relative problems are its level of innovation/commercialism
and its levels of investment. The various gauges and weights are shown below. The individual indicators that are behind them are
explained in the appendix of this study. Please review this table to understand our comments.

UNITED ARAB EMIRATES—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 5.5% 2

Working-Age Population Growth 0.8% 6

Growth Per Worker Estimate 4.8% 3

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 4

What You Pay vs. What You Get 45% 14

Education 11% 15

Labor Productivity 11% 13

Working Hard 11% 5

Investing 11% 20

Culture 20% 3

Corruption 3% 5

Bureaucracy 3% 2

Rule of Law 3% 5

Savoring Life vs. Achieving 3% 1

Innovation 3% 31

Self Sufficiency 3% 1

Indebtedness 35% 1

Debt Levels and Flow 18% 3

Monetary Policy 18% 1

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
108
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the United Arab Emirates

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

The United Arab Emirates offers somewhat better than average value, ranked 14th of 35 countries we measure. Its workers are
somewhat inexpensive, weighing the United Arab Emirates’s high levels of education (according to tertiary education rates)
and very poor quality of education (according to PISA test scores). Further, people in the United Arab Emirates work very long
hours relative to the cost of their labor—the average person of working age works 40.6 hours per week (1st out of 35 countries,
and 3rd out of 35 countries after adjusting for income), although the demographics of the workforce are unfavorable (according
to the projected 10-year change in the dependency ratio). Levels of saving and investing are roughly average given the United
Arab Emirates’s high per capita income levels, with investment at about 20% of GDP (17th out of 35 countries). The United
Arab Emirates’s capital stock per capita (its structures, machinery, transportation equipment, software and intellectual property)
is growing at a rate of 1.4% per year (vs. an average of +1% across the emerging world). Investment is about as productive as
investment in other countries with similar levels of economic development, ranked 13th out of 18 emerging countries (measuring
productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Emirati culture appears to be a significant contributor to growth in coming years, ranked 3rd among the countries we measure.
Note that our culture measures compare the United Arab Emirates to countries of similar levels of economic development. Start-
ing with self-sufficiency, the United Arab Emirates is rated very well on this measure, weighing that its workers have a relatively
strong work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of govern-
ment support is very low (with government outlays of 27% of GDP and transfer payments to households of 1% of GDP), and
its labor markets are very flexible. The United Arab Emirates also seems to value achieving much more than savoring—again,
its work ethic is relatively strong, but it lacks the survey data our measures use to triangulate this view. Furthermore, innovation
and commercialism are very weak in the United Arab Emirates relative to income. We see the country investing moderately
in research and innovation, and its outputs from innovation, including inventions and earnings, are low. Finally, relative to its
income, the United Arab Emirates has very low bureaucracy and red tape, somewhat low corruption, and very strong rule of law,
according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
The United Arab Emirates’s indebtedness position is better than other countries, ranked 1st out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has a moderate amount of room to lever up in the future. The total
debt burden is around 158% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its
growth was neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of
monetary policy is generally a bit stimulative.

109
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

POLAND’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Poland’s real growth rate over the next 10 years will be in the vicinity of
2.9%. This growth rate is well above the global average, ranked 7th out of 35 major economies, and 7th out of 18 emerging coun-
tries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the
Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks,
natural disasters, or wars).

In Poland’s case, our growth estimate comes from combining our expectation of a 3.5% growth rate per worker, which is well
above the global average, and a labor force growth rate of -0.6%, which will weigh on growth. The growth in output per worker
is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in indebt-
edness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our produc-
tivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Poland’s productivity growth to be about average compared to most major countries (implying
a growth rate of 2.7% on its own), and indebtedness conditions to be slightly better than other countries (implying a growth rate
of 4.3% on its own). As shown below, Poland’s biggest relative strengths are the value its workers provide relative to education
levels and its monetary policy, and its biggest relative problems are how hard its people work and its level of self-sufficiency. The
various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this
study. Please review this table to understand our comments.

POLAND—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.9% 7

Working-Age Population Growth -0.6% 27

Growth Per Worker Estimate 3.5% 6

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 18

What You Pay vs. What You Get 45% 15

Education 11% 12

Labor Productivity 11% 9

Working Hard 11% 14

Investing 11% 12

Culture 20% 25

Corruption 3% 24

Bureaucracy 3% 27

Rule of Law 3% 31

Savoring Life vs. Achieving 3% 11

Innovation 3% 23

Self Sufficiency 3% 24

Indebtedness 35% 3

Debt Levels and Flow 18% 7

Monetary Policy 18% 4

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

110
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Poland

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Poland offers around average value, ranked 15th of 35 countries we measure. Its workers are somewhat inexpensive, weighing
Poland’s low levels of education (according to tertiary education rates) and good quality of education (according to PISA test
scores). Further, people in Poland work long hours relative to the cost of their labor—the average person of working age works
24.0 hours per week (12th out of 35 countries, and 13th out of 35 countries after adjusting for income), although the demo-
graphics of the workforce are about average (according to the projected 10-year change in the dependency ratio). Levels of saving
and investing are roughly average given Poland’s about average per capita income levels, with investment at about 13% of GDP
(33rd out of 35 countries). Poland’s capital stock per capita (its structures, machinery, transportation equipment, software and
intellectual property) is growing at a rate of 1.2% per year (vs. an average of +1% across the emerging world). Investment is more
productive than investment in other countries with similar levels of economic development, ranked 1st out of 18 emerging coun-
tries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Polish culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 25th among the
countries we measure. Note that our culture measures compare Poland to countries of similar levels of economic development.
Starting with self-sufficiency, Poland is rated pretty poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is high (with government outlays of 46% of GDP and transfer payments to households of 22% of GDP), and its labor markets
are moderately flexible. Poland also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak,
and surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commer-
cialism are somewhat weak in Poland relative to income. We see the country investing neither lightly nor heavily in research
and innovation, and its outputs from innovation, including inventions and earnings, are very low. Finally, relative to its income,
Poland has average levels of bureaucracy and red tape, average levels of corruption, and somewhat weak rule of law, according to
the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Poland’s indebtedness position is better than other countries, ranked 3rd out of the 35 countries we look at. Based on current debt
levels and debt service costs, the country has a bit of room to lever up in the future. The total debt burden is around 136% of GDP
(incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither supported nor
depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally neutral.

111
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

COLOMBIA’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Colombia’s real growth rate over the next 10 years will be in the vicinity
of 2.8%. This growth rate is somewhat above the global average, ranked 10th out of 35 major economies, and 10th out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Colombia’s case, our growth estimate comes from combining our expectation of a 2.3% growth rate per worker, which is some-
what above the global average, and a labor force growth rate of 0.5%, which will moderately boost growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Colombia’s productivity growth to be somewhat better than most major countries (implying a
growth rate of 2.7% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 1.5% on its own). As shown below, Colombia’s biggest relative strengths are the value its workers provide relative to edu-
cation levels and its levels of investment, and its biggest relative problems are its monetary policy and its debt and debt service
levels (though compared to other countries it doesn’t rate especially poorly on these measures). The various gauges and weights
are shown below. The individual indicators that are behind them are explained in the appendix of this study. Please review this
table to understand our comments.

COLOMBIA—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.8% 10

Working-Age Population Growth 0.5% 9

Growth Per Worker Estimate 2.3% 13

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 7

What You Pay vs. What You Get 45% 4

Education 11% 4

Labor Productivity 11% 4

Working Hard 11% 8

Investing 11% 8

Culture 20% 22

Corruption 3% 14

Bureaucracy 3% 19

Rule of Law 3% 26

Savoring Life vs. Achieving 3% 24

Innovation 3% 19

Self Sufficiency 3% 18

Indebtedness 35% 7

Debt Levels and Flow 18% 10

Monetary Policy 18% 9

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

112
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Colombia

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Colombia offers much better than average value, ranked 4th of 35 countries we measure. Its workers are somewhat inexpensive,
even taking into consideration Colombia’s about average levels of education (according to tertiary education rates) and very poor
quality of education (according to PISA test scores). Further, people in Colombia work very long hours relative to the cost of their
labor—the average person of working age works 25.5 hours per week (9th out of 35 countries, and 7th out of 35 countries after
adjusting for income), although the demographics of the workforce are about average (according to the projected 10-year change
in the dependency ratio). Levels of saving and investing are somewhat high given Colombia’s low per capita income levels, with
investment at about 7% of GDP (35th out of 35 countries). Colombia’s capital stock per capita (its structures, machinery, trans-
portation equipment, software and intellectual property) is growing at a rate of 0.5% per year (vs. an average of +1% across the
emerging world). Investment is about as productive as investment in other countries with similar levels of economic development,
ranked 14th out of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Colombian culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 22nd among the
countries we measure. Note that our culture measures compare Colombia to countries of similar levels of economic development.
Starting with self-sufficiency, Colombia is rated pretty poorly on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is high (with government outlays of 34% of GDP and transfer payments to households of 19% of GDP), and its labor
markets are moderately flexible. Colombia also seems to value savoring much more than achieving—again, its work ethic is
relatively weak, and surveys suggest that its people don’t value accomplishment and achievement. Furthermore, innovation and
commercialism are about average in Colombia relative to income. We see the country investing lightly in research and innova-
tion, though its outputs from innovation, including inventions and earnings, are high. Finally, relative to its income, Colombia
has somewhat low bureaucracy and red tape, average levels of corruption, and average rule of law, according to the international
measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Colombia’s indebtedness position is better than other countries, ranked 7th out of the 35 countries we look at. Based on current
debt levels and debt service costs, the country has a bit of room to lever up in the future. The total debt burden is around 128% of
GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was supported by high
credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally neutral.

113
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CHILE’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Chile’s real growth rate over the next 10 years will be in the vicinity of 2.4%. This
growth rate is somewhat above the global average, ranked 13th out of 35 major economies, and 13th out of 18 emerging countries.
As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the Appendix:
Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks, natural disasters,
or wars). Please note that Chile is a large net exporter of commodities (net commodity exports are ~15% of GDP). Our growth esti-
mate is on the non-commodity part of the economy. We do not have a view on the long-term growth in commodity exports.

In Chile’s case, our growth estimate comes from combining our expectation of a 2.2% growth rate per worker, which is somewhat
above the global average, and a labor force growth rate of 0.2%, which will moderately boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Chile’s productivity growth to be somewhat better than most major countries (implying a
growth rate of 2.5% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 1.6% on its own). As shown below, Chile’s biggest relative strengths are the value its workers provide relative to education
levels and its level of bureaucracy, and its biggest relative problems are its debt and debt service levels and its monetary policy.
The various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix
of this study. Please review this table to understand our comments.

CHILE—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.4% 13

Working-Age Population Growth 0.2% 14

Growth Per Worker Estimate 2.2% 14

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 14

What You Pay vs. What You Get 45% 16

Education 11% 9

Labor Productivity 11% 15

Working Hard 11% 12

Investing 11% 14

Culture 20% 15

Corruption 3% 3

Bureaucracy 3% 12

Rule of Law 3% 13

Savoring Life vs. Achieving 3% 28

Innovation 3% 17

Self Sufficiency 3% 13

Indebtedness 35% 16

Debt Levels and Flow 18% 15

Monetary Policy 18% 22

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

114
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Chile

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Chile offers around average value, ranked 16th of 35 countries we measure. Its workers are somewhat inexpensive, even tak-
ing into consideration Chile’s low levels of education (according to tertiary education rates) and very poor quality of education
(according to PISA test scores). Further, people in Chile work long hours relative to the cost of their labor—the average person
of working age works 24.0 hours per week (13th out of 35 countries, and 12th out of 35 countries after adjusting for income),
although the demographics of the workforce are about average (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are roughly average given Chile’s about average per capita income levels, with investment
at about 19% of GDP (20th out of 35 countries). Chile’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 0.7% per year (vs. an average of +1% across the emerging world).
Investment is about as productive as investment in other countries with similar levels of economic development, ranked 15th out
of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Chilean culture appears to be an around average contributor to growth in coming years, ranked 15th among the countries we
measure. Note that our culture measures compare Chile to countries of similar levels of economic development. Starting with
self-sufficiency, Chile is rated about average on this measure, weighing that its workers have a relatively weak work ethic (con-
sidering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is neutral
(with government outlays of 29% of GDP and transfer payments to households of 19% of GDP), and its labor markets are
moderately flexible. Chile also seems to value savoring much more than achieving—again, its work ethic is relatively weak, and
surveys suggest that its people don’t value accomplishment and achievement. Furthermore, innovation and commercialism are
about average in Chile relative to income. We see the country investing very lightly in research and innovation, though its out-
puts from innovation, including inventions and earnings, are high. Finally, relative to its income, Chile has very low bureaucracy
and red tape, somewhat low corruption, and somewhat strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Chile’s indebtedness position is about average compared to other countries, ranked 16th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. In the past few years, its
growth was neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of
monetary policy is generally a bit tight.

115
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SWEDEN’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Sweden’s real growth rate over the next 10 years will be in the vicinity of
2.3%. This growth rate is somewhat above the global average, ranked 14th out of 35 major economies, and 1st out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Sweden’s case, our growth estimate comes from combining our expectation of a 1.9% growth rate per worker, which is roughly
in line with the global average, and a labor force growth rate of 0.4%, which will moderately boost growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Sweden’s productivity growth to be about average compared to most major countries (implying
a growth rate of 2.3% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 1.3% on its own). As shown below, Sweden’s biggest relative strengths are its level of innovation/commercialism and its level
of bureaucracy, and its biggest relative problems are its debt and debt service levels and how hard its people work. The various
gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study.
Please review this table to understand our comments.

SWEDEN—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 2.3% 14

Working-Age Population Growth 0.4% 12

Growth Per Worker Estimate 1.9% 16

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 21

What You Pay vs. What You Get 45% 23

Education 11% 28

Labor Productivity 11% 26

Working Hard 11% 23

Investing 11% 27

Culture 20% 13

Corruption 3% 6

Bureaucracy 3% 20

Rule of Law 3% 16

Savoring Life vs. Achieving 3% 14

Innovation 3% 4

Self Sufficiency 3% 27

Indebtedness 35% 28

Debt Levels and Flow 18% 33

Monetary Policy 18% 12

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

116
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Sweden

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Sweden offers somewhat worse than average value, ranked 23rd of 35 countries we measure. Its workers are neither expensive
nor inexpensive, weighing Sweden’s about average levels of education (according to tertiary education rates) and about average
quality of education (according to PISA test scores). Further, people in Sweden don’t work long hours relative to the cost of their
labor—the average person of working age works 19.9 hours per week (26th out of 35 countries, and 27th out of 35 countries after
adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in the
dependency ratio). Levels of saving and investing are somewhat low given Sweden’s high per capita income levels, with invest-
ment at about 26% of GDP (3rd out of 35 countries). Sweden’s capital stock per capita (its structures, machinery, transportation
equipment, software and intellectual property) is growing at a rate of 2.2% per year (vs. an average of +1% across the developed
world). Investment is about as productive as investment in other countries with similar levels of economic development, ranked
11th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Swedish culture appears to be a somewhat better than average contributor to growth in coming years, ranked 13th among the
countries we measure. Note that our culture measures compare Sweden to countries of similar levels of economic development.
Starting with self-sufficiency, Sweden is rated very poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is high (with government outlays of 48% of GDP and transfer payments to households of 23% of GDP), and its labor markets
are moderately rigid. Sweden also seems to value savoring a bit more than achieving—again, its work ethic is relatively weak, but
surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation and commercialism
are very strong in Sweden relative to income. We see the country investing heavily in research and innovation, and its outputs
from innovation, including inventions and earnings, are very high. Finally, relative to its income, Sweden has somewhat low
bureaucracy and red tape, somewhat low corruption, and somewhat strong rule of law, according to the international measures
we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Sweden’s indebtedness position is slightly worse than other countries, ranked 28th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around
359% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was neither
supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is
generally a bit tight.

117
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THAILAND’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Thailand’s real growth rate over the next 10 years will be in the vicinity
of 1.9%. This growth rate is roughly at the global average, ranked 17th out of 35 major economies, and 15th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Thailand’s case, our growth estimate comes from combining our expectation of a 2.7% growth rate per worker, which is
somewhat above the global average, and a labor force growth rate of -0.7%, which will weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Thailand’s productivity growth to be much better than most major countries (implying a
growth rate of 3.0% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 2.0% on its own). As shown below, Thailand’s biggest relative strengths are its levels of investment and the value its work-
ers provide relative to education levels, and its biggest relative problems are its monetary policy and its shrinking workforce. The
various gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this
study. Please review this table to understand our comments.

THAILAND—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.9% 17

Working-Age Population Growth -0.7% 29

Growth Per Worker Estimate 2.7% 11

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 6

What You Pay vs. What You Get 45% 8

Education 11% 10

Labor Productivity 11% 14

Working Hard 11% 9

Investing 11% 5

Culture 20% 7

Corruption 3% 12

Bureaucracy 3% 5

Rule of Law 3% 2

Savoring Life vs. Achieving 3% 20

Innovation 3% 14

Self Sufficiency 3% 11

Indebtedness 35% 15

Debt Levels and Flow 18% 13

Monetary Policy 18% 30

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

118
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Thailand

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Thailand offers somewhat better than average value, ranked 8th of 35 countries we measure. Its workers are somewhat inexpen-
sive, even taking into consideration Thailand’s somewhat low levels of education (according to tertiary education rates) and very
poor quality of education (according to PISA test scores). Further, people in Thailand work long hours relative to the cost of their
labor—the average person of working age works 24.6 hours per week (11th out of 35 countries, and 8th out of 35 countries after
adjusting for income), although the demographics of the workforce are unfavorable (according to the projected 10-year change
in the dependency ratio). Levels of saving and investing are somewhat high given Thailand’s low per capita income levels, with
investment at about 16% of GDP (26th out of 35 countries). Thailand’s capital stock per capita (its structures, machinery, trans-
portation equipment, software and intellectual property) is growing at a rate of 0.9% per year (vs. an average of +1% across the
emerging world). Investment is more productive than investment in other countries with similar levels of economic development,
ranked 7th out of 18 emerging countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Thai culture appears to be a significant contributor to growth in coming years, ranked 7th among the countries we measure. Note
that our culture measures compare Thailand to countries of similar levels of economic development. Starting with self-sufficiency,
Thailand is rated about average on this measure, weighing that its workers have a somewhat weak work ethic (considering a variety
of indicators including hours worked, retirement age, and vacations), its level of government support is low (with government out-
lays of 24% of GDP and transfer payments to households of 9% of GDP), and its labor markets are moderately flexible. Thailand
also seems to value savoring much more than achieving—again, its work ethic is somewhat weak, and surveys suggest that its
people don’t especially value accomplishment and achievement. Furthermore, innovation and commercialism are about average
in Thailand relative to income. We see the country investing heavily in research and innovation, and its outputs from innovation,
including inventions and earnings, are about average. Finally, relative to its income, Thailand has very low bureaucracy and red
tape, somewhat low corruption, and very strong rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Thailand’s indebtedness position is about average compared to other countries, ranked 15th out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has little room to lever up in the future. The total debt burden
is around 258% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
supported by high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally
a bit tight.

119
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

HUNGARY’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Hungary’s real growth rate over the next 10 years will be in the vicinity
of 1.9%. This growth rate is roughly at the global average, ranked 18th out of 35 major economies, and 16th out of 18 emerging
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Hungary’s case, our growth estimate comes from combining our expectation of a 2.4% growth rate per worker, which is some-
what above the global average, and a labor force growth rate of -0.5%, which will moderately weigh on growth. The growth in out-
put per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Hungary’s productivity growth to be about average compared to most major countries (imply-
ing a growth rate of 2.4% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth
rate of 1.9% on its own). As shown below, Hungary’s biggest relative strengths are the value its workers provide relative to edu-
cation levels and its levels of investment, and its biggest relative problems are its debt and debt service levels and how hard its
people work. The various gauges and weights are shown below. The individual indicators that are behind them are explained in
the appendix of this study. Please review this table to understand our comments.

HUNGARY—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.9% 18

Working-Age Population Growth -0.5% 26

Growth Per Worker Estimate 2.4% 12

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 19

What You Pay vs. What You Get 45% 13

Education 11% 14

Labor Productivity 11% 7

Working Hard 11% 17

Investing 11% 11

Culture 20% 26

Corruption 3% 34

Bureaucracy 3% 28

Rule of Law 3% 32

Savoring Life vs. Achieving 3% 18

Innovation 3% 12

Self Sufficiency 3% 22

Indebtedness 35% 17

Debt Levels and Flow 18% 24

Monetary Policy 18% 8

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

120
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Hungary

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Hungary offers somewhat better than average value, ranked 13th of 35 countries we measure. Its workers are somewhat inex-
pensive, even taking into consideration Hungary’s somewhat low levels of education (according to tertiary education rates) and
poor quality of education (according to PISA test scores). Further, people in Hungary work an average number of hours relative
to the cost of their labor—the average person of working age works 21.0 hours per week (20th out of 35 countries, and 18th
out of 35 countries after adjusting for income), although the demographics of the workforce are about average (according to the
projected 10-year change in the dependency ratio). Levels of saving and investing are roughly average given Hungary’s about
average per capita income levels, with investment at about 22% of GDP (10th out of 35 countries). Hungary’s capital stock per
capita (its structures, machinery, transportation equipment, software and intellectual property) is growing at a rate of 3.3% per
year (vs. an average of +1% across the emerging world). Investment is more productive than investment in other countries with
similar levels of economic development, ranked 6th out of 18 emerging countries (measuring productivity as incremental growth
for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Hungarian culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 26th among the
countries we measure. Note that our culture measures compare Hungary to countries of similar levels of economic development.
Starting with self-sufficiency, Hungary is rated pretty poorly on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is high (with government outlays of 49% of GDP and transfer payments to households of 16% of GDP), and its labor
markets are very flexible. Hungary also seems to value savoring much more than achieving—again, its work ethic is relatively
weak, and surveys suggest that its people don’t especially value accomplishment and achievement. Furthermore, innovation and
commercialism are about average in Hungary relative to income. We see the country investing heavily in research and inno-
vation, and its outputs from innovation, including inventions and earnings, are about average. Finally, relative to its income,
Hungary has average levels of bureaucracy and red tape, somewhat high corruption, and somewhat weak rule of law, according
to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Hungary’s indebtedness position is about average compared to other countries, ranked 17th out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has very little room to lever up in the future. In the past few years,
its growth was heavily supported by high credit creation, which is very restrictive for growth going forward. Lastly, the stance
of monetary policy is generally neutral.

121
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

THE CZECH REPUBLIC’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that the Czech Republic’s real growth rate over the next 10 years will be in the
vicinity of 1.9%. This growth rate is roughly at the global average, ranked 19th out of 35 major economies, and 17th out of 18
emerging countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In the Czech Republic’s case, our growth estimate comes from combining our expectation of a 1.8% growth rate per worker,
which is roughly in line with the global average, and a labor force growth rate of 0.0%, which will have little impact on growth.
The growth in output per worker is driven significantly by productivity and indebtedness. Over the long term, productivity mat-
ters most, while swings in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year
time frame, we weigh our productivity measures about two-thirds and our indebtedness measure about one-third (though there
is no precision here).

Over the next 10 years, we expect the Czech Republic’s productivity growth to be about average compared to most major coun-
tries (implying a growth rate of 1.2% on its own), and indebtedness conditions to be about average compared to other countries
(implying a growth rate of 2.1% on its own). As shown below, the Czech Republic’s biggest relative strengths are the value its
workers provide relative to education levels and its levels of investment (though compared to other countries it doesn’t rate espe-
cially well on these measures), and its biggest relative problems are its monetary policy and how hard its people work. The various
gauges and weights are shown below. The individual indicators that are behind them are explained in the appendix of this study.
Please review this table to understand our comments.

CZECH REPUBLIC—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.9% 19

Working-Age Population Growth 18

Growth Per Worker Estimate 1.8% 19

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 22

What You Pay vs. What You Get 45% 19

Education 11% 19

Labor Productivity 11% 19

Working Hard 11% 18

Investing 11% 13

Culture 20% 31

Corruption 3% 32

Bureaucracy 3% 34

Rule of Law 3% 33

Savoring Life vs. Achieving 3% 22

Innovation 3% 22

Self Sufficiency 3% 19

Indebtedness 35% 10

Debt Levels and Flow 18% 8

Monetary Policy 18% 25

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
122
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Czech Republic

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

The Czech Republic offers around average value, ranked 19th of 35 countries we measure. Its workers are somewhat inexpen-
sive, weighing the Czech Republic’s low levels of education (according to tertiary education rates) and good quality of education
(according to PISA test scores). Further, people in the Czech Republic work an average number of hours relative to the cost of
their labor—the average person of working age works 22.3 hours per week (16th out of 35 countries, and 19th out of 35 coun-
tries after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year
change in the dependency ratio). Levels of saving and investing are roughly average given the Czech Republic’s high per capita
income levels, with investment at about 23% of GDP (7th out of 35 countries). The Czech Republic’s capital stock per capita (its
structures, machinery, transportation equipment, software and intellectual property) is growing at a rate of 0.5% per year (vs.
an average of +1% across the emerging world). Investment is more productive than investment in other countries with similar
levels of economic development, ranked 4th out of 18 emerging countries (measuring productivity as incremental growth for
each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Czech culture appears to be a much worse than average contributor to growth in coming years, ranked 31st among the countries
we measure. Note that our culture measures compare the Czech Republic to countries of similar levels of economic develop-
ment. Starting with self-sufficiency, the Czech Republic is rated pretty poorly on this measure, weighing that its workers have
a relatively weak work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level
of government support is high (with government outlays of 45% of GDP and transfer payments to households of 21% of GDP),
and its labor markets are moderately flexible. The Czech Republic also seems to value savoring a bit more than achieving—again,
its work ethic is relatively weak, but it lacks the survey data our measures use to triangulate this view. Furthermore, innovation
and commercialism are about average in the Czech Republic relative to income. We see the country investing heavily in research
and innovation, though its outputs from innovation, including inventions and earnings, are low. Finally, relative to its income,
the Czech Republic has somewhat high bureaucracy and red tape, somewhat high corruption, and somewhat weak rule of law,
according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
The Czech Republic’s indebtedness position is slightly better than other countries, ranked 10th out of the 35 countries we look at.
Based on current debt levels and debt service costs, the country has a bit of room to lever up in the future. The total debt burden
is around 154% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally a bit tight.

123
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PORTUGAL’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Portugal’s real growth rate over the next 10 years will be in the vicinity
of 1.1%. This growth rate is somewhat below the global average, ranked 27th out of 35 major economies, and 9th out of 17
developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Portugal’s case, our growth estimate comes from combining our expectation of a 1.9% growth rate per worker, which is roughly
in line with the global average, and a labor force growth rate of -0.8%, which will weigh on growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Portugal’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 1.5% on its own), and indebtedness conditions to be about average compared to other countries (implying a growth
rate of 2.6% on its own). As shown below, Portugal’s biggest relative strengths are its monetary policy and its level of bureaucracy
(though compared to other countries it doesn’t rate especially well on these measures), and its biggest relative problems are its
debt and debt service levels and its shrinking workforce. The various gauges and weights are shown below. The individual indi-
cators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

PORTUGAL—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 1.1% 27

Working-Age Population Growth -0.8% 31

Growth Per Worker Estimate 1.9% 18

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 24

What You Pay vs. What You Get 45% 22

Education 11% 22

Labor Productivity 11% 22

Working Hard 11% 24

Investing 11% 17

Culture 20% 28

Corruption 3% 16

Bureaucracy 3% 25

Rule of Law 3% 29

Savoring Life vs. Achieving 3% 31

Innovation 3% 26

Self Sufficiency 3% 30

Indebtedness 35% 11

Debt Levels and Flow 18% 16

Monetary Policy 18% 5

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

124
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Portugal

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Portugal offers somewhat worse than average value, ranked 22nd of 35 countries we measure. Its workers are somewhat inex-
pensive, even taking into consideration Portugal’s low levels of education (according to tertiary education rates) and poor quality
of education (according to PISA test scores). Further, people in Portugal work an average number of hours relative to the cost of
their labor—the average person of working age works 20.1 hours per week (25th out of 35 countries, and 21st out of 35 countries
after adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in
the dependency ratio). Levels of saving and investing are roughly average given Portugal’s about average per capita income levels,
with investment at about 22% of GDP (11th out of 35 countries). Portugal’s capital stock per capita (its structures, machinery,
transportation equipment, software and intellectual property) is growing at a rate of 2.0% per year (vs. an average of +1% across the
developed world). Investment is more productive than investment in other countries with similar levels of economic development,
ranked 6th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Portuguese culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 28th among the
countries we measure. Note that our culture measures compare Portugal to countries of similar levels of economic development.
Starting with self-sufficiency, Portugal is rated very poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is high (with government outlays of 45% of GDP and transfer payments to households of 24% of GDP), and its labor markets
are moderately rigid. Portugal also seems to value savoring much more than achieving—again, its work ethic is relatively weak,
but it lacks the survey data our measures use to triangulate this view. Furthermore, innovation and commercialism are somewhat
weak in Portugal relative to income. We see the country investing neither lightly nor heavily in research and innovation, and its
outputs from innovation, including inventions and earnings, are low. Finally, relative to its income, Portugal has somewhat low
bureaucracy and red tape, average levels of corruption, and somewhat weak rule of law, according to the international measures
we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Portugal’s indebtedness position is slightly better than other countries, ranked 11th out of the 35 countries we look at. Based
on current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is
around 251% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was
neither supported nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary
policy is generally neutral.

125
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

BELGIUM’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Belgium’s real growth rate over the next 10 years will be in the vicinity
of 0.9%. This growth rate is somewhat below the global average, ranked 28th out of 35 major economies, and 10th out of 17
developed countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics
detailed in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or
political shocks, natural disasters, or wars).

In Belgium’s case, our growth estimate comes from combining our expectation of a 1.1% growth rate per worker, which is somewhat
below the global average, and a labor force growth rate of -0.2%, which will moderately weigh on growth. The growth in output
per worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our
productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Belgium’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 0.9% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of
1.5% on its own). As shown below, Belgium’s biggest relative strengths are its level of bureaucracy and its level of corruption relative
to income (though compared to other countries it doesn’t rate especially well on these measures), and its biggest relative problems
are its debt and debt service levels and how hard its people work. The various gauges and weights are shown below. The individual
indicators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

BELGIUM—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.9% 28

Working-Age Population Growth -0.2% 20

Growth Per Worker Estimate 1.1% 26

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 33

What You Pay vs. What You Get 45% 31

Education 11% 30

Labor Productivity 11% 29

Working Hard 11% 28

Investing 11% 31

Culture 20% 30

Corruption 3% 25

Bureaucracy 3% 30

Rule of Law 3% 24

Savoring Life vs. Achieving 3% 34

Innovation 3% 18

Self Sufficiency 3% 32

Indebtedness 35% 25

Debt Levels and Flow 18% 30

Monetary Policy 18% 13

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

126
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Belgium

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Belgium offers much worse than average value, ranked 31st of 35 countries we measure. Its workers are neither expensive nor
inexpensive, weighing Belgium’s about average levels of education (according to tertiary education rates) and about average qual-
ity of education (according to PISA test scores). Further, people in Belgium don’t work long hours relative to the cost of their
labor—the average person of working age works 16.7 hours per week (33rd out of 35 countries, and 34th out of 35 countries after
adjusting for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in the
dependency ratio). Levels of saving and investing are somewhat low given Belgium’s high per capita income levels, with invest-
ment at about 25% of GDP (5th out of 35 countries). Belgium’s capital stock per capita (its structures, machinery, transportation
equipment, software and intellectual property) is growing at a rate of 0.8% per year (vs. an average of +1% across the developed
world). Investment is less productive than investment in other countries with similar levels of economic development, ranked
15th out of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Belgian culture appears to be a much worse than average contributor to growth in coming years, ranked 30th among the coun-
tries we measure. Note that our culture measures compare Belgium to countries of similar levels of economic development.
Starting with self-sufficiency, Belgium is rated very poorly on this measure, weighing that its workers have a relatively weak work
ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support
is very high (with government outlays of 55% of GDP and transfer payments to households of 28% of GDP), and its labor mar-
kets are moderately rigid. Belgium also seems to value savoring much more than achieving—again, its work ethic is relatively
weak, but it lacks the survey data our measures use to triangulate this view. Furthermore, innovation and commercialism are
about average in Belgium relative to income. We see the country investing neither lightly nor heavily in research and innovation,
and its outputs from innovation, including inventions and earnings, are about average. Finally, relative to its income, Belgium
has average levels of bureaucracy and red tape, average levels of corruption, and average rule of law, according to the international
measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Belgium’s indebtedness position is slightly worse than other countries, ranked 25th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around
363% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was supported
by high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally a bit tight.

127
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

NORWAY’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Norway’s real growth rate over the next 10 years will be in the vicinity of 0.8%.
This growth rate is well below the global average, ranked 30th out of 35 major economies, and 12th out of 17 developed countries.
As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed in the Appendix:
Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political shocks, natural disasters,
or wars). Please note that Norway is a very large net exporter of commodities (net commodity exports are ~23% of GDP). Our growth
estimate is on the non-commodity part of the economy. We do not have a view on the long-term growth in commodity exports.

In Norway’s case, our growth estimate comes from combining our expectation of a 0.6% growth rate per worker, which is well
below the global average, and a labor force growth rate of 0.1%, which will moderately boost growth. The growth in output per
worker is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings
in indebtedness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh
our productivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Norway’s productivity growth to be much worse than most major countries (implying a growth
rate of 0.2% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate of 1.4%
on its own). As shown below, Norway’s biggest relative strengths are its rule of law and its level of bureaucracy, and its biggest
relative problems are its debt and debt service levels and the value its workers provide relative to education levels. However, we
put less stock in our assessment of Norway’s indebtedness given its significant stock of assets (e.g., FX reserves and/or sovereign
wealth fund assets) that are not considered in this measurement. The various gauges and weights are shown below. The individual
indicators that are behind them are explained in the appendix of this study. Please review this table to understand our comments.

NORWAY—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.8% 30

Working-Age Population Growth 0.1% 16

Growth Per Worker Estimate 0.6% 32

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 35

What You Pay vs. What You Get 45% 35

Education 11% 34

Labor Productivity 11% 34

Working Hard 11% 32

Investing 11% 35

Culture 20% 23

Corruption 3% 18

Bureaucracy 3% 23

Rule of Law 3% 12

Savoring Life vs. Achieving 3% 19

Innovation 3% 24

Self Sufficiency 3% 25

Indebtedness 35% 23

Debt Levels and Flow 18% 29

Monetary Policy 18% 11

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.
128
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Norway

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Norway offers much worse than average value, ranked 35th of 35 countries we measure. Its workers are somewhat expen-
sive, weighing Norway’s somewhat low levels of education (according to tertiary education rates) and poor quality of education
(according to PISA test scores). Further, people in Norway don’t work long hours relative to the cost of their labor—the average
person of working age works 18.3 hours per week (27th out of 35 countries, and 32nd out of 35 countries after adjusting for
income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are somewhat low given Norway’s very high per capita income levels, with investment at
about 21% of GDP (13th out of 35 countries). Norway’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 1.6% per year (vs. an average of +1% across the developed world).
Investment is less productive than investment in other countries with similar levels of economic development, ranked 17th out of
17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Norwegian culture appears to be a somewhat worse than average contributor to growth in coming years, ranked 23rd among the
countries we measure. Note that our culture measures compare Norway to countries of similar levels of economic development.
Starting with self-sufficiency, Norway is rated pretty poorly on this measure, weighing that its workers have a relatively weak
work ethic (considering a variety of indicators including hours worked, retirement age, and vacations), its level of government
support is high (with government outlays of 46% of GDP and transfer payments to households of 22% of GDP), and its labor
markets are neither rigid nor flexible. Norway also seems to value savoring a bit more than achieving—again, its work ethic is
relatively weak, and surveys suggest that its people moderately value accomplishment and achievement. Furthermore, innovation
and commercialism are somewhat weak in Norway relative to income. We see the country investing neither lightly nor heavily
in research and innovation, and its outputs from innovation, including inventions and earnings, are very low. Finally, relative to
its income, Norway has somewhat low bureaucracy and red tape, average levels of corruption, and somewhat strong rule of law,
according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Norway’s indebtedness position is slightly worse than other countries, ranked 23rd out of the 35 countries we look at. However,
we put less stock in our assessment of Norway’s indebtedness given its significant stock of assets (e.g., FX reserves and/or sov-
ereign wealth fund assets) that are not considered in this measurement. In the past few years, its growth was neither supported
nor depressed by credit creation, which is neutral for growth going forward. Lastly, the stance of monetary policy is generally a
bit tight.

129
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

GREECE’S PROJECTED 10-YEAR FUTURE GROWTH

Based on our economic health index, we project that Greece’s real growth rate over the next 10 years will be in the vicinity of
0.0%. This growth rate is well below the global average, ranked 33rd out of 35 major economies, and 15th out of 17 developed
countries. As a reminder, this estimate (and this writing) is based on our computer-generated analysis of the statistics detailed
in the Appendix: Measuring Future Growth Prospects and doesn’t account for exogenous shocks (like commodity or political
shocks, natural disasters, or wars).

In Greece’s case, our growth estimate comes from combining our expectation of a 0.9% growth rate per worker, which is well
below the global average, and a labor force growth rate of -0.9%, which will weigh on growth. The growth in output per worker
is driven significantly by productivity and indebtedness. Over the long term, productivity matters most, while swings in indebt-
edness tend to be an important driver in the short term. Given that we are looking at a 10-year time frame, we weigh our produc-
tivity measures about two-thirds and our indebtedness measure about one-third (though there is no precision here).

Over the next 10 years, we expect Greece’s productivity growth to be somewhat worse than most major countries (implying a
growth rate of 0.9% on its own), and indebtedness conditions to be slightly worse than other countries (implying a growth rate
of 0.7% on its own). As shown below, Greece’s biggest relative strengths are the value its workers provide relative to education
levels and its level of bureaucracy (though compared to other countries it doesn’t rate especially well on these measures), and its
biggest relative problems are its debt and debt service levels and its shrinking workforce. The various gauges and weights are
shown below. The individual indicators that are behind them are explained in the appendix of this study. Please review this table
to understand our comments.

GREECE—FUTURE GROWTH ESTIMATE

Future Growth Estimate Growth Estimate Score Rank

-4.00 0 4.00
Final Growth Estimate 0.0% 33

Working-Age Population Growth -0.9% 32

Growth Per Worker Estimate 0.9% 30

Breaking Down our Growth per Worker Estimate Weight Score Rank
-4.00 0 4.00
Productivity (vs. similar income countries)* 65% 28

What You Pay vs. What You Get 45% 21

Education 11% 20

Labor Productivity 11% 20

Working Hard 11% 22

Investing 11% 22

Culture 20% 34

Corruption 3% 27

Bureaucracy 3% 29

Rule of Law 3% 34

Savoring Life vs. Achieving 3% 35

Innovation 3% 30

Self Sufficiency 3% 31

Indebtedness 35% 26

Debt Levels and Flow 18% 35

Monetary Policy 18% 16

Note: Scores here reflect the number of standard deviations away from the average observation across countries and time.
*All productivity-related scores are relative to countries with similar income levels, because we think these measures matter relative to cost. We generally see that
less wealthy countries score worse outright on our culture measures, but we would expect businesspeople to accept somewhat worse corruption, bureaucracy, etc. as
the cost of doing business in a cheaper country. But if a country has poor culture even relative to countries of a similar income level, we would expect that to weigh
on the decision to do business in those countries and thus weigh on potential growth. You can see more detail on these adjustments in the appendix.

130
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

More Detail on the Greece

As mentioned, the descriptions below are based on influences that are conveyed in gauges that are made up of a composite of
indicators, shown in the appendix. So, if you want to see why we are saying what we are saying, you can trace them through by
looking at those statistics.

Productivity
Value: What You Pay Versus What You Get
A country’s productivity and competitiveness are mostly a function of the relative value it offers, especially for its labor. As shorthand for
this, we refer to our gauge of this relative value as "what you pay versus what you get"; it reflects a) the cost and value of employees and
b) the levels of investment. Countries that have well-educated workers who are relatively inexpensive and that have higher investment
rates grow faster than those that don’t.

Greece offers around average value, ranked 21st of 35 countries we measure. Its workers are somewhat inexpensive, even taking
into consideration Greece’s about average levels of education (according to tertiary education rates) and very poor quality of edu-
cation (according to PISA test scores). Further, people in Greece don’t work long hours relative to the cost of their labor—the
average person of working age works 18.0 hours per week (29th out of 35 countries, and 26th out of 35 countries after adjusting
for income), and the demographics of the workforce are unfavorable (according to the projected 10-year change in the dependency
ratio). Levels of saving and investing are roughly average given Greece’s about average per capita income levels, with investment
at about 15% of GDP (29th out of 35 countries). Greece’s capital stock per capita (its structures, machinery, transportation equip-
ment, software and intellectual property) is growing at a rate of 3.0% per year (vs. an average of +1% across the developed world).
Investment is more productive than investment in other countries with similar levels of economic development, ranked 4th out
of 17 developed countries (measuring productivity as incremental growth for each additional dollar of capital).

Culture
Just looking solely at the relative value of a country’s workers misses the role that the culture plays in determining how much a country
will grow. As I’ve discussed, culture influences the decisions people make about factors like savings rates or how many hours they work
each week, which we measure in the previously-shown indicators, but culture can also influence work attitudes, levels of efficiency,
reliability, and other such influences on whether countries underperform or outperform.

Greek culture appears to be a much worse than average contributor to growth in coming years, ranked 34th among the countries
we measure. Note that our culture measures compare Greece to countries of similar levels of economic development. Starting
with self-sufficiency, Greece is rated very poorly on this measure, weighing that its workers have a relatively weak work ethic
(considering a variety of indicators including hours worked, retirement age, and vacations), its level of government support is very
high (with government outlays of 53% of GDP and transfer payments to households of 24% of GDP), and its labor markets are
moderately flexible. Greece also seems to value savoring much more than achieving—again, its work ethic is relatively weak, but
it lacks the survey data our measures use to triangulate this view. Furthermore, innovation and commercialism are very weak in
Greece relative to income. We see the country investing neither lightly nor heavily in research and innovation, and its outputs from
innovation, including inventions and earnings, are very low. Finally, relative to its income, Greece has average levels of bureaucracy
and red tape, somewhat high corruption, and very weak rule of law, according to the international measures we are using.

Indebtedness
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited amount of it that you can
use to get an extra boost, but you can’t live on it forever. When you are taking it out, you can spend more than is sustainable, but when
debts can no longer be raised relative to incomes and the time for paying back comes, the process works in reverse. You can get a picture of
where countries stand in the long-term debt cycle and the likelihood of debt being a support or detriment to future growth by assessing the
past reliance on debt to support incomes and the attractiveness of taking on new debt.

The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth.
Greece’s indebtedness position is slightly worse than other countries, ranked 26th out of the 35 countries we look at. Based on
current debt levels and debt service costs, the country has very little room to lever up in the future. The total debt burden is around
297% of GDP (incl. financial firm debts), compared to a global average of 236%. In the past few years, its growth was supported
by high credit creation, which is restrictive for growth going forward. Lastly, the stance of monetary policy is generally a bit tight.

131
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

APPENDIX: MORE DETAIL

ON EACH OF THE GAUGES

■  ducation: What is the quantity of educated people at different levels and what is the quality of their
E
education? The gauge use measures of basic and higher education, split about evenly between the two.
Half of the measures capture absolute quantity of educated people at various levels and about half is
placed on quality rankings such as higher education, test scores, and average years of education.
■ Innovation & Technology: This gauge measures inventiveness, technological advancement, and en-
trepreneurship. It gives about half its weight to the country’s absolute share of key innovation metrics
(e.g., patents, researchers, R&D spending, and venture capital funding), and half to a combination of
external rankings and measures of innovation per capita (to help capture how widespread innovation is
in the economy).
■ Cost Competitiveness: This gauge measures what one gets for what one pays. We want to see this be-
cause countries that produce the best at costs that are too expensive aren’t in good shape, even though
they rank highly in quality. We look at quality-adjusted and productivity-adjusted labor costs, along
with other productivity measures.
■ Infrastructure & Investment: This gauge measures the quantity of infrastructure and investment
spending and the quality of it. It captures a country’s absolute share of global investment, as well the
extent to which a country prioritizes quality of infrastructure and productivity-enhancing investments.
The gauge weighs measures of investment as a share of world investment, overall infrastructure quality,
investment and savings as a share of GDP, and logistics performance.
■ Economic Output: This gauge measures the strength of a country’s economic resources. We measure
output primarily through GDP levels as a share of world (adjusted for price differences across coun-
tries). We allocate some weight to GDP per capita rather than total GDP to capture quality.
■ Productivity/Output Growth: This gauge measures how well a country is positioned to grow its econ-
omy over the next 10 years. We look at a variety of metrics to estimate forward-looking 10-year eco-
nomic growth, placing 2/3 weight on metrics that predict productivity, and 1/3 on metrics that predict
the impact of indebtedness on growth.
■ Trade: This gauge measures how strong an exporter a country is. It looks at the absolute level of a
country’s exports as a share of the world. China scores highest (being the largest exporter in the world),
followed by the Eurozone and the US.
■ Military Strength: This gauge is driven mostly by absolute share of military spending and strength
measured by number of personnel, nuclear weapons, and external indices of military capabilities. It
does not look at military powers in varying regions or of various types, failing to capture some military
superiorities Russia and China have in certain geographic areas, certain types of military technologies,
and the role of alliances in shaping the balance of military power.
■ Financial Markets and Financial Center: This gauge measures the level of development and the size
of a country’s financial markets and financial center. We’re looking at absolute measures of transaction
shares and market capitalizations, as well as more qualitative external indices of financial center cities.

132
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

■  eserve Status: This gauge measures the extent to which a country’s currency operates as a global
R
reserve currency. We measure reserve status by the share of transactions, debts, and reserves that are
denominated or held in a country’s currency.
■ Indebtedness (Debt Cycles): This gauge is based on a combination of a) debt levels relative to asset
levels, b) the sizes of its external and internal surpluses and deficits, c) the sizes of its debt service costs
relative to GDP, d) the amount of debt in its own currency or foreign currency, e) the amount that is
held by its own citizens versus foreigners, and d) its credit rating. It has been composed this way because
this way has shown to be best in foreshadowing declines in real wealth, whether these declines come in
the form of a) debt defaults that result from not creating enough money and credit to satisfy excessive
debt needs or b) devaluations that come from creating more than enough money and credit to satisfy ex-
cessive debt needs. We constructed this index to not include the reserve currency status of the currency
so that we could separately see the debt burden from the ability to fund it because it has a reserve cur-
rency. That way we can see the exposure the country would have if it lost its reserve currency status.
■ Internal Conflict (Social & Political): This gauge looks at how much domestic conflict and discon-
tent there is within a country. It measures actual conflict events (e.g. protests), political conflict (e.g.
partisanship), and general discontent (based on surveys).
■ Rule of Law/Governance: This gauge measures the extent to which a country’s legal system is consis-
tent, predictable, and conducive to growth and advancement. The gauge combines rule of law measures
(based primarily on business surveys of doing business in the country) and corruption measures (via a
combination of external corruption indices and surveys from businesses).
■ Gaps in Wealth, Opportunity, & Values: This gauge measures how big the gaps in wealth/income,
opportunities, and values are. This gauge combines measures of both a) wealth and income inequality
(e.g. how much does the top 1% have vs the rest) as well as b) political conflict (e.g. how split is the leg-
islature on ideology).
■ Geology: This gauge measures each country’s geographic endowment, including land size and value
of its natural resources. It includes the total production of energy, agriculture, and industrial metals in
order to capture the absolute production capacity of each nation, as well as net exports to capture rela-
tive self-reliance for each of the categories (in addition to measuring some other natural resources like
freshwater supply).
■ Character/Civility/Determination: This gauge attempts to measure to what extent the attitudes of
each country’s people create an environment that’s supportive to civility and hard work which supports
growth and advancement. This gauge uses a) surveys around attitudes towards working hard and suc-
cess, and b) other measures that proxy how much a society values self-sufficiency and work (e.g., gov-
ernment transfer payments size, effective retirement age) to quantify this.
■ Resource Allocation Efficiency: This gauge attempts to measure how each country is using its labor
and capital. It looks at whether the country has chronically high unemployment (i.e. not finding effi-
cient ways to employ its people), if debt growth generates commensurate income growth over time, and
external indices and surveys about the rigidity of the labor market and ease of getting loans.
■ Acts of Nature: This gauge measures how vulnerable to and impacted by acts of nature each country is.
While it is difficult to quantify all the various acts of nature that might impact a country, we used ex-
pert assessments of future climate change impact on each country’s GDP, external assessments of each
countries’ preparedness for natural disasters, and the outcomes from the COVID pandemic (as that
was a real time test against an act of nature). I consider this rating so-so and find that there is still a lot
more we want to capture to make this gauge better, hence its low quality.

133
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

■  xternal Conflict: The external conflict gauge measures the levels of economic, political/cultural, and
E
military conflict between pairs of major countries. Within each category, we tried to come up with a mix
of structural indicators (to establish a baseline level of conflict between countries) and timely indicators
(to flag major escalations above that baseline). For example, for economic conflict we look at bilateral
trade between countries, tariff rates, and also track timely news around sanctions, trade wars, etc.
■ Health Index: The health index looks first at the life expectancy of the population at birth and then
layers on a number of other hard facts about life in the country including child mortality, the cleanli-
ness of air and drinking water, access to basic sanitation, quality nutrition, crime and public safety, and
access to essential health services.
■ Happiness Index: The happiness index tries to measure the happiness of the country’s people primarily
using surveys of reported happiness, daily enjoyment, life satisfaction, and the feeling of having a good
social support network. Along with these surveys, we also look at the suicide rate in the country as an-
other measure of unhappiness and dissatisfaction with society.

134
 THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS
APPENDIX: CONSIDERING QUALITY VERSUS QUANTITY AND THE SIZE OF COUNTRIES
Each determinant is an aggregate of many indicators that I combined in the way that I felt best captured that particular determinant, giving
consideration to both measures of absolute size (like share of global exports) and measures that adjust for/remove size (like GDP per capita or PISA test
scores). Some determinants use a mix of both types of measures, and some are all one type. I tried to structure these weightings so that I could imagine
who would win if countries had a competition like the Olympics or a war. However, in doing this exercise, I found it helpful to see how countries would
score if I just looked at things on a per capita/quality basis, which would allow me to differentiate between countries that are extremely developed and
capable, but small (like Singapore) versus countries that get a lot of credit for being big (like India). The scores shown in the table below are the weighted
average percent rank from 0% (scoring worst on all underlying measures) to 100% (scoring best on all underlying measures) of all the underlying indicators
that make up the determinant, shown if we include all the measures (“Total”) or only per capita/quality measures. In case it is helpful or interesting to
you, you can review those scores below shown as of July 2024.*
Headline Empire Scores Across Major Countries
Competitiveness,
Innovation and Markets & Financial
Empire Score Education Culture, Military Strength Trade Economic Output Reserve Currency Status
Technology 5 Center
Investment
Per Capita/ Per Capita/ Per Capita/ Per Capita/ Per Capita/ Per Capita/ Per Capita/ Per Capita/
Country Total Total Total Total Total Total Total Total Total
Quality Only Quality Only Quality Only Quality Only Quality Only Quality Only Quality Only Quality Only
USA 0.89 0.71 87% 96% 68% 70% 52% 86% 84% 73% 32% 49% 61% 99% 100% 100% 83%
Powers
Strong

CHN 0.80 0.30 72% 56% 64% 54% 86% 63% 6% 100% 8% 45% 16% 44% 39% 5% 1%
EUR 0.56 0.43 59% 80% 36% 43% 46% 38% 25% 79% 37% 38% 45% 40% 34% 36% 33%
DEU 0.38 0.54 45% 82% 35% 60% 39% 20% 21% 51% 100% 18% 52% 25% 36% --- ---
JPN 0.33 0.40 48% 82% 34% 55% 43% 27% 11% 13% 29% 19% 40% 29% 49% 10% 23%

†
KOR 0.32 0.54 50% 89% 38% 70% 54% 33% 56% 7% 59% 6% 42% 15% 29% 0% 1%
Middle Powers

IND 0.30 0.07 36% 5% 10% 16% 42% 51% 1% 6% 0% 20% 6% 6% 5% 0% 0%

GBR 0.29 0.46 48% 89% 26% 43% 32% 34% 26% 15% 58% 11% 44% 25% 39% 10% 41%
FRA 0.27 0.45 41% 81% 25% 47% 33% 33% 34% 14% 59% 11% 43% 25% 45% --- ---
RUS 0.26 0.28 38% 61% 15% 24% 27% 53% 41% 0% 14% 14% 26% 0% 1% 0% 0%
SGP 0.24 0.89 35% 71% 26% 59% 61% 14% 92% 11% 100% 1% 100% 19% 39% 0% 7%
AUS 0.23 0.56 44% 89% 24% 51% 31% 22% 37% 0% 31% 3% 48% 17% 47% 3% 37%
TUR 0.21 0.28 20% 37% 17% 37% 49% 28% 16% 0% 12% 10% 29% 0% 0% 0% 0%
CAN 0.21 0.50 45% 89% 22% 45% 27% 16% 21% 4% 68% 4% 47% 18% 52% 4% 28%
CHE 0.19 0.66 40% 83% 32% 69% 45% 0% 18% 2% 100% 1% 68% 18% 84% 0% 9%
BRZ 0.18 0.14 17% 25% 11% 25% 22% 27% 6% 0% 4% 10% 13% 1% 2% 0% 0%
NLD 0.17 0.55 37% 76% 29% 65% 39% 0% 25% 12% 100% 2% 55% 19% 50% --- ---
Minor Powers

IDR 0.17 0.13 13% 13% 8% 20% 34% 25% 0% 0% 2% 8% 11% 0% 0% 0% 0%

ITA 0.17 0.31 32% 63% 15% 31% 26% 27% 28% 6% 48% 8% 40% 14% 28% --- ---
ESP 0.17 0.34 33% 65% 11% 23% 39% 18% 19% 0% 46% 5% 38% 19% 31% --- ---
SAR 0.15 0.45 19% 45% 11% 26% 33% 25% 100% 0% 38% 4% 45% 0% 5% 0% 1%
MEX 0.14 0.15 24% 38% 5% 11% 28% 14% 2% 2% 17% 9% 19% 0% 1% 0% 0%
SAF 0.10 0.12 12% 30% 7% 17% 23% 11% 0% 0% 6% 3% 12% 0% 1% 0% 0%
ARG 0.07 0.14 12% 24% 6% 16% 1% 15% 2% 0% 6% 3% 20% 0% 0% 0% 0%
* In a few cases where there were no quality measures, I had to create quality measures by adjusting the quantity for a country’s population, turning it into a per capita measure. We did not give reserve currency status scores
to the countries that share the euro, which is why those measures are displayed as dashes.
†
Because the notion of competitiveness is inherently relative, we only show the total score for this measure.
135
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

APPENDIX: MEASURING WELL-BEING

In measuring a country’s well-being (beyond its economic situation), I am trying to capture two concepts:
the health and the happiness of the population. These concepts are of course related to the country’s economic
situation, but they are not fully explained by it and they are important measures in their own right for under-
standing the success of a country and its leaders in producing a good life for its people. In this appendix, I will
provide more detail on the construction of the health and happiness indices.
■ Health Index: The health index looks first at the life expectancy of the population at birth and then
layers on a number of other hard facts about life in the country including child mortality, the clean-
liness of air and drinking water, access to basic sanitation, quality nutrition, crime and public safety,
and access to essential health services. On these measures, Japan and Australia rank the highest of the
countries covered in this report while South Africa and India rank the lowest.
■ Happiness Index: The happiness index tries to measure the happiness of the country’s people primarily
using surveys of reported happiness, daily enjoyment, life satisfaction, and the feeling of having a good
social support network. Along with these surveys, we also look at the suicide rate in the country as an-
other measure of unhappiness and dissatisfaction with society.

The tables below describe the construction of the gauges in fuller detail:

CONSTRUCTION OF HEALTH INDEX

Concept Weight

Health Index 100%

Life Expectancy At Birth 30.0%

Child Mortality (Deaths / 1000 Live Births) 10.0%

Air Pollution Exposure (PPM) 5.0%

Share of Population Using Safely Managed Drinking Water 5.0%

Share of Population With Basic Sanitation Facilities 5.0%

Share of Population Facing Food Insecurity 15.0%

Homicide Rate (Per 100,000 People) 7.5%

Share of Population Displaced By Conflict 7.5%

Share of Population With Access To Essential Health Services 15.0%

CONSTRUCTION OF HAPPINESS INDEX

Concept Weight

Happiness Index 100%

Share of Population Reported Happy 22.5%

Share of Population Reported Daily Enjoyment 22.5%

Reported Life Satisfaction (1–10) 22.5%

Share of Population Reports Having Good Social Support Network 22.5%

Suicide Rate (Per 100,000 People) 10.0%

136
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

APPENDIX: MEASURING FUTURE GROWTH PROSPECTS

In this section, I share the key drivers of productivity that make up my forecast of future economic growth.
That index is made up of 19 economic health gauges, made up of 81 indicators, and it shows what these gauges
portend for real GDP growth in each of these countries over the next 10 years. This economic health index
provides both a reliable prognosis for each of these country’s growth rates over the next 10 years and a reliable
formula for success. By looking at these cause-effect relationships in much the same way as a doctor looks at
one’s genetics, blood tests, exercise and diet, we can see both each country’s health prospects and what changes
policymakers can make so that these countries become economically healthier.

Part 1: Formula for Economic Success........................................................................... 138

Part 2: Economic Health Indices by Country, and the Prognoses that they Imply.... 157

137
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PART 1: THE FORMULA FOR ECONOMIC SUCCESS

What determines which countries prosper and which countries don’t? What determines different countries’
future growth rates? In my capacity as a global macro investor who has invested in many countries for several
decades and researched cause-effect relationships for investment purposes, I look at relationships between
causes and effects that we hope will be useful to others in answering these questions.
While many people have provided opinions about why countries succeed and fail economically, few have
shown linkages between causes and effects. Often, even commonly agreed-upon indicators of what is good for
an economy have not been properly analyzed and correlated with subsequent results. For example, everyone
knows that having a more educated population is better than having a less educated population, so naturally
we hear that improving education is important to improving productivity. However, indicators of the cost-ef-
fectiveness of education are lacking and correlations of the factors with subsequent growth don’t exist, at least
to my knowledge. That is dangerous. For example, if policy makers simply educate people without considering
the costs and paybacks of that education, they will waste resources and make their economies less productive
even though we will become more educated people. To make matters worse, the views of those who influence
policies typically reflect their ideological inclinations (e.g., being politically left or right), which divides people.
For this reason, I believe that objective good indicators that are logically correlated with subsequent results are
needed so that the facts speak for themselves and help people reach agreement about what should be done. That
is what I believe I provide here. The economic health indicators that I will show would have predicted the sub-
sequent 10-year real growth of the 35 countries shown over the last 70 years within 2% of the realized growth
90% of the time and within 1% 61% of the time.
While I believe that the body of evidence I will show you is compelling, I certainly don’t claim to have all
the answers or expect people to blindly follow what is presented here without poking at it. On the contrary, I
am putting these cause-effect relationships on the table to help foster discussion to bring about progress. I hope
that people with divergent views will explore and debate how the economic machine works by looking at both
the logic and the evidence presented here and enter into the process of making improvements in an open-source
way with me. People, most importantly policymakers and investors can use this to see what these determinants
portend for the future, and explore what can be done to make the future better. Having said that, we are con-
fident enough in these estimates to bet on their accuracy, which we do in our investments.

The Determinants of Economic Health Are Timeless and Universal

As with human bodies, the economies of different countries have worked in essentially the same ways for as
far back as you can see while they also have evolved over time. The most important cause-effect relationships
have been timeless and universal and evolutionary changes have logical determinants that changed them. In
this section I review these most important cause-effect relationships and look at many countries in different
timeframes to show how they worked. I am laying these out for you to consider. I don’t believe that it is good
enough for me to just show the correlations between changes in these factors and their outcomes. Instead, I am
starting with the logical cause-effect relationships that feel obvious. If the logic does not make sense, I can’t be
confident that a statistical relationship will persist into the future. I will first present the concepts and then take
you into the indicators to show how they worked in the past and what they portend for the future.

138
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

What Are the Keys to Success?

I Will Start with a Top-Down Perspective: As with health, many factors (reflected in many statistics) pro-
duce good and bad outcomes. One can approach them by looking down on the forest or building up from the
trees. I chose to present them from the top down to provide the big picture perspective simply and then flesh
out the picture with more detail. Receiving information presented this way will require you to be patient with
the sweeping generalizations I make until I get down to the particulars that make them up, which will show
both the norms and the exceptions.
Productivity Influences on Growth and Debt Influences Are Most Important When Trying to Project
Economic Growth 10 Years Ahead: As explained in my books “Principles for Dealing with the Changing
World Order” and “Principles for Navigating Big Debt Crises”, while productivity growth is ultimately what
matters for long-term prosperity, the effects of debt cycles are substantial over the short and medium term. For
that reason, it is impossible to look at growth periods without calculating the effects of debt cycles. Of course,
when one lengthens the observed timeframe, the shorter-term volatility that is due to debt swings diminishes
in importance. We chose to look at rolling 10-year periods of 35 countries which gave us a sample size of 218
observations (where we measure every 5 years).
The Big Picture: Stepping away from the wiggles, and looking at the big picture from the top down, one
can see that the big shifts in economic growth are about two-thirds driven by productivity and one-third driven
by indebtedness. “Luck” (e.g., having a lot of resources when the resources are valuable) and “conflict” (espe-
cially wars) are also drivers.

Productivity

A country’s production (GDP) will equal its number of workers times the output per worker (productivity).
One can increase one’s productivity either by working harder or by working smarter. Productivity is driven by
how cost-effectively one can produce, so, relative productivity—i.e., competitiveness—will have a big effect
on relative growth. In a global economy those producers who are more competitive will both 1) sell more in
their own country and other countries, and 2) move their production to countries where they can produce more
cost-effectively. Likewise, investors will follow these opportunities.
Competitiveness (i.e., relative productivity levels) is driven by what you get relative to what you pay in one
country versus another. Countries are just the aggregates of the people and the companies that make them up.
As you know with the individuals you hire and from the products you buy, those that offer the most value for
money are the most competitive and do better than those that don’t.
Specific Indicators: Since people are the largest cost of production, it follows that those countries that offer
the best “value” (i.e., the most productive workers per dollar of cost) will, all else being equal, experience the
most demand for their people. That is why the per-hour-worked cost differences of educated people (i.e.,
their income after adjusting for hours worked each year) is one of the best indicators of productivity. Other
obvious and important factors that influence productivity include the cost of uneducated people, levels of bu-
reaucracy, attitudes about work, raw material costs, lending, and capital market efficiencies—i.e., everything
that affects the value of what is produced relative to the cost of making it. In other words, there is a world mar-
ket for productive resources that increases the demand, and hence the growth rates, for the countries that are
most competitive because of the cost of production arbitrage. That cost of production arbitrage has been a big
driver of growth—in fact overwhelmingly the largest. To reiterate, the magnitude of this competitiveness arbi-
trage is driven more by the cost of the workers relative to how hard they work, their education, and investment

139
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

levels, than by anything else. These variables characterize the value of hiring a worker in a given country and
doing business there (i.e., what you pay for what you get).
Of course, barriers to the flow of trade and capital (like China’s closed door policies until the early 1980s,
geographic isolation, etc.) can stand in the way of people, companies, and countries being allowed to compete.
As these barriers break down (e.g., transportation becomes cheaper and quicker, telecommunications reduce
impediments to intellectual competition, etc.) or increase (e.g., trade barriers are put up), the ability to arbi-
trage the costs of production, and in turn the relative growth rates, is affected. Well developed debt and capital
markets, when run efficiently, provide resources to those with good ideas to raise productivity. The surest way
to raise productivity is to give well educated, talented, hard working, inventive people financial resources in a
country that runs efficiently.
While countries that operate efficiently will grow at faster paces than countries that operate ineffi-
ciently, the countries that will grow the fastest are those that have big inefficiencies that are rapidly being
disposed of. As an example, in the 1970s and 1980s, China had a well-educated, intelligent labor force that
could work for cheap, but faced a closed-door policy. Opening the door unleashed China’s great potential.
Looking forward, while the United States is relatively efficient, it would not grow as fast as Mexico (i.e., which
has competitively priced educated people with low debt) if Mexico could significantly reduce its barriers to pro-
ductivity (e.g., corruption, lack of investment, lack of innovation etc.). That is why I am most optimistic about
inefficient countries that are undertaking the sort of reforms that are described in this section.
Culture is one of the biggest drivers of productivity. It’s intuitive that what a country’s people value and
how they operate together matters for a country’s competitive position. Culture influences the decisions people
make about factors such as savings rates or how many hours they work each week. Culture can also help explain
why a country can appear to have the right ingredients for growth but consistently underperform, or vice versa.
For example, in Russia, which has a lot of untapped potential, the culture that affects lifestyles (e.g., alcoholism,
the low drive to succeed, etc.) causes it to substantially under-live its potential, while in Singapore, where high
income levels make their labor relatively uncompetitive, their lifestyles and values (e.g., around working, saving,
and investing) allow them to realize a higher percentage of their potential. While lots of elements of culture
can matter, the ones that I find matter most are: 1) the extent to which individuals enjoy the rewards and suf-
fer the penalties of their productivity (i.e., the degrees of their self-sufficiency), 2) how much the people value
savoring life versus achieving, 3) the extent to which innovation and commercialism are valued, 4) the degree
of bureaucracy, 5) the extent of corruption, and 6) the extent to which there is rule of law. Basically, countries
that have people who earn their keep, strive to achieve and innovate, and facilitate an efficient market-based
economy will grow faster than countries that prioritize savoring life, undermine market forces through highly
redistributive systems, and have inefficient institutions.
To be clear, I am not making any value judgments. It would be illogical for me to say that people who savor
non-work activities are making a mistake relative to people who love working. It is, however, not illogical for
me to say that people who savor non-work activities are likely to be less productive than those who love working.

Indebtedness

Well developed debt and capital markets can contribute a lot to putting resources in the hands of talented,
hard working people. At the risk of repeating myself too many times, I will review the way I look at debt cycles
because I carry that perspective into my calculations in explaining 10-year growth rates.
As explained, short-term volatility is more due to debt cycles than productivity, but this volatility cancels out
over time because credit allows people to consume more than they produce when they acquire it, and it forces

140
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

people to consume less than they produce when they pay it back. Undulations around long-term productivity
are driven by debt cycles. Remember, in an economy without credit, the only way to increase your spending is
to produce more, but in an economy with credit, you can also increase your spending by borrowing. That creates
cycles. When debt levels are low relative to income levels and are rising, the upward cycle is self-reinforcing
on the upside because rising spending generates rising incomes and rising net worth, which raise borrowers’
capacity to borrow, which allows more buying and spending, etc. However, since debts can’t rise faster than
money and income forever, there are limits to debt growth.
Think of debt growth that is faster than income growth as being like air in a scuba bottle—there is a limited
amount of it that you can use to get an extra boost, but you can’t live on it forever. In the case of debt, you can
take it out before you put it in (i.e., if you don’t have any debt, you can take it out), but you are expected to return
what you took out. When you are taking it out, you can spend more than is sustainable, which will give you
the appearance of being prosperous. At such times, you and those who are lending to you might mistake you as
being creditworthy and not pay enough attention to what paying back will look like. When debts can no longer
be raised relative to incomes and the time for paying back comes, the process works in reverse.
You can get a picture of where countries stand in the long-term debt cycle and the likelihood of debt being
a support or detriment to future growth by assessing the past reliance on debt to support incomes and the
attractiveness of taking on new debt. For these reasons I expect countries that have a) low amounts of debt
relative to incomes, b) debt growth rates that are low in relation to income growth rates, and c) easier mon-
etary policies to grow faster over the next 10 years than countries with d) high amounts of debt relative to
incomes, e) debt growth rates that are high in relation to income growth rates, and f) tighter monetary pol-
icies. That is true with one exception, which is when adequate financial intermediaries don’t exist. Institutions
and capital markets that facilitate these transactions have to be in place for the system to work. For that reason,
when forecasting long-term future growth rates, we have taken into consideration the levels of development of
countries’ financial intermediaries.

The Interaction of These Forces Is Driven by Human Nature

While productivity and indebtedness can be thought of as separate concepts, they are ultimately a function
of the choices people make and their psychology. I briefly touched on culture as an influence on these choices
and their outcomes. Also, I observe important shifts in attitudes from one generation to the next, which are
due to their different experiences. In The Changing World Order, I describe how psychology tends to shift as
countries move through their economic life cycles. It is worth touching on this influence here before I delve into
an examination of what all the economic health indicators are pointing to for the 35 major economies.
In addition to productivity and the debt cycles I spoke about, there tends to be a psychologically motivated
cycle that occurs as a function of one’s past level of prosperity and whether one experienced improving or wors-
ening economic conditions. When a country is poor and focused on survival, its people who have subsistence
lifestyles don’t waste money because they value it a lot and they don’t have any debt to speak of because savings
are short and nobody wants to lend to them. Even though the country’s labor is low-cost, it is not competitive,
and the lack of investment stymies future productivity gains.
Some emerge from this stage and others don’t, with culture and location being two of the biggest deter-
minants. For those that do—either because a country removes a big barrier like being closed to the world (as
China did in 1980) or simply because a more gradual evolution makes their labor attractive—a virtuous cycle
can kick in. At this stage, the investments are not just inexpensive; the stock of infrastructure and other physi-
cal capital is also typically low and there is lots of room to adopt existing technologies that can radically improve
the country’s potential.

141
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Leveraging up (increasing one’s indebtedness) can feed back into higher productivity and competitiveness
gains, which produce high returns that attract more investment at a time when the capacity to leverage is high.
The key is that this money and credit must be used to produce investments that yield enough returns to pay for
the debt service and finance further growth (so that incomes rise as fast as or faster than debts).
As countries grow wealthier, more and more of the credit tends to fuel consumption rather than investment.
A process that was once virtuous can become self-destructive. The decreased investment in quality projects
means productivity growth slows, even as the borrowing and spending makes incomes grow and labor more
expensive. People feel rich and begin taking more leisure—after all, asset prices are high—even though their
balance sheets are starting to deteriorate.
At this point, debt burdens start to compound and incomes grow faster than productivity growth. In other
words, the country tends to become over-indebted and uncompetitive. The country is becoming poor even
though it is still behaving as though it is rich. Eventually the excess tends to lead to bubbles bursting, a period
of slow decline and deleveraging. Suffice it to say that when looking at a country’s potential to grow, it is critical
to look at the country’s productivity and indebtedness holistically, as part of its stage of development.

A Formula for Future Growth

As explained, my research team and I built the formula for future growth from the top down. We started
with my concepts of how productivity and indebtedness affect growth, then fleshed these forces out with
specific indicators, and then saw how the formula created this way worked. I followed this approach because
I believe that one should be able to describe the cause-effect relationships and the logic behind them without
looking at the data and that only after doing that should one look at the data to see how well the descriptions
square with what happened because otherwise one would be inclined to be blinded by data and not force oneself
to objectively test one’s understanding of the cause-effect relationships.
As mentioned, from what I can tell, about two-thirds of a country’s 10-year growth rates will be due to
productivity and about one-third will be due to indebtedness. The visual below conveys these two forces. Our
productivity indicators aim to measure how steep the productivity growth line will be over time, and our in-
debtedness measures aim to measure how debt cycles will influence growth over the medium term.

Growth
(GDP)

Productivity

Indebtedness

Time

142
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Below is a list of what I have come to learn about these things along with the names of the indices my
research team and I created to reflect them. Based on the reasons outlined there, we created a simple log-
ic-weighted index of productivity and a simple logic-weighted index of indebtedness. We used the same set of
factors weighed the same way for each gauge across all the countries and across all timeframes. That way, there
was no fitting the data and our measures for productivity and indebtedness are timeless and universal.
After creating these indices, we observed how each predicted the subsequent 10 years’ growth rates for each
country (which we measure every 5 years). In other words, we observed rather than fit the data. The table below
shows the concepts, their weights, and their correlations with the next 10 years’ per capita growth rates for our
universe of 35 countries. Together these indicators were 81% correlated with the countries’ subsequent growth
rates. Below we show how well these measures related to future growth across countries and time.

A SUMMARY OF OUR REASONS

Reasoning Corr. to Growth Weight

Growth Per Worker Estimate 81% 100.0%

Productivity (vs. similar income countries) Producing more by working harder or smarter 64% 65.0%
Culture influences the choices people make and the effectiveness
Culture 49% 19.5%
of an economic system
Corruption Corruption deters investment and distorts market incentives 50% 3.3%

Bureaucracy Lots of red tape and regulation stymies business activity 21% 3.3%
Investors and businesses need to feel secure their agreements
Rule of Law 38% 3.3%
and property will be protected
Those who value achievement will be more successful in finding
Savoring Life vs Achieving 40% 3.3%
ways to be more productive
Countries that value new ideas and invest in them will find new
Innovation 36% 3.3%
better ways to produce faster
The ability to independently support oneself is healthy and
Self Sufficiency 32% 3.3%
important to being successful
Countries that offer the most value for money do better than those
What You Pay vs. What You Get 60% 45.5%
that don't
A better educated worker will be more effective today and offers
Education 64% 11.4%
more promise for tomorrow
Workers of similar education producing more in the same amount
Labor Productivity 49% 11.4%
of time are more attractive
Hard workers will generally produce more and find ways to
Working Hard 61% 11.4%
improve faster
Countries that save and invest in productive capital and
Investing 51% 11.4%
infrastructure improve their potential
Indebtedness Swings in credit drive swings in spending and economic growth 34% 35.0%
Countries with high debt burdens have less room to leverage and
Debt Levels and Flow 32% 17.5%
take on new debt
Monetary Policy Monetary policy can make new borrowing more or less attractive 15% 17.5%

Note: As mentioned, our gauges of productivity and indebtedness are constructed using simple logic-based weights. Within productivity, we put two-thirds weight
on what you pay versus what you get and one-third on culture. Within each of these gauges we put equal weight on the different sub-pieces. Within our indebted-
ness gauge, we put half the weight on debt cycle dynamics and half on monetary policy.
Note 2: My approach to research is to first think through what makes sense to me and then to look at the data to stress test my thinking. This is a very different
approach compared to optimization methods (or data mining) which typically go to the data first, and fish for relationships and conclusions. Because I was asked
how much better the results would be if we let the computer fit the equations, we ran the data-fitting exercise and observed that if we do that, the correlations with
future growth don’t change much (they’re likewise in the range of 80-90% correlated with future growth depending on the process used).

143
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

These measures of productivity and indebtedness can be used to predict each country’s absolute and relative
growth rates over the next 10 years, or longer periods. They also can be used by policy makers to indicate what
levers they can move to influence future growth. To reiterate, my goal is to get the big picture right—i.e., to
reliably be approximately right by focusing on the most important drivers rather than to try to be precise by
focusing on the details.
Before looking at the picture we will show you how our aggregate indicator would have predicted growth
versus what actually occurred. While staring at the observations helps us ground ourselves in reality and test
our logic, we know there is no precision in the specific numbers and what matters most to us is whether our
logic is strong. Our examination covers 218 separate observations across 35 different countries over the last 70+
years, which provides a wide range of different environments to test our indicator. Along with the correlation of
our predictions and what growth actually materialized (shown below), another test is how reliably we predicted
something reasonably close to what happened. In our set, our aggregate predictions for a country’s average
growth over the next decade were within one percent of the actual growth 61% of the time, and within two
percent 90% of the time.

ESTIMATE OF FUTURE GROWTH (X) VS.

SUBSEQUENT 10YR GROWTH (Y)
EM DM Correlation WLD: 81% (EM: 82%, DM: 82%)
12%

10%

8%

6%

4%

2%

0%

-2%
-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12%

Because these are timeless and universal drivers, we expect them to be just as important in developed coun-
tries as they are in emerging ones. The type of investment or education that matters may shift, but ultimately
whether a country sees productivity growth is still going to be largely a function of the basic building blocks
of productivity — whether its workers offer value, whether it is investing and creating a culture of success
— as well as how its indebtedness is evolving. As you can see above, across the countries we have examined
our aggregate indicator is about as correlated with future growth for developed and emerging countries (82%
correlated with the growth in income per worker in developed countries and 82% correlated in emerging coun-
tries). Of course, which countries are ‘developed’ or ‘emerging’ changes over very long periods. So in these tests,
we adjust for that, for example excluding Japan in the 1960s when it was much more like an emerging country.

144
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Below we show the same perspective for each of our productivity and indebtedness gauges, comparing what
they implied individually for a country’s growth versus what happened. As you can see our measure of pro-
ductivity is more strongly correlated with each country’s growth than our indebtedness measure is (74% versus
53%), which makes sense given it is the more important driver over the timeframes tested. Still, each has a fairly
good relationship on its own.

PRODUCTIVITY (ERROR ADJUSTED) EST. OF

FUTURE GROWTH (X) VS. SUBSEQUENT 10YR GROWTH (Y)
EM DM Correlation WLD: 74% (EM: 74%, DM: 80%)
12%

10%

8%

6%

4%

2%

0%

-2%
-2% 0% 2% 4% 6% 8% 10% 12%

INDEBTEDNESS (ERROR ADJUSTED) SCORE (X)

VS. SUBSEQUENT 10YR GROWTH (Y)
EM DM Correlation WLD: 53% (EM: 47%, DM: 55%)
12%

10%

8%

6%

4%

2%

0%

-2%
-4 -3 -2 -1 0 1 2 3 4

To reiterate, I believe getting to this fundamental level is critical to understanding and predicting the
growth of countries. Naïve measures of a country’s future growth—for example just income on its own or a
country’s trailing growth—won’t get you much because they won’t help you get at the drivers. They also tend
to be much worse predictors than the formula I have described here (about 25% as good by traditional statis-
tical measures). Looking at the economy as a machine and granularly measuring the cause-effect relationships
makes all the difference.

145
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Projections

I will start with our projections and then explain how they were derived.
As discussed, by looking at the elements that drive productivity and indebtedness you can arrive at a view
of how fast a country will grow its output per worker. Since economic growth is mechanically just a function of
growth in its a) output per worker and b) number of workers, it’s then a simple step for us to estimate economic
growth. In the following section we quickly scan what our projections show. We go into greater depth on the
reasons behind them in the appendix.
Below we show our final estimate for real GDP growth over 10 years in each major country.

AGGREGATE ESTIMATE OF FUTURE RGDP GROWTH (10 YEARS)

Growth Estimate (Error Adjusted) Error Un-
-6.3% 0 6.3% Adjusted adjusted

IND 6.3% 8.1%

UAE 5.5% 5.7%
IDR 5.5% 6.8%
SAR 4.6% 5.4%
TUR 4.0% 4.0%
CHN 4.0% 3.7%
PLD 2.9% 2.5%
SAF 2.9% 4.5%
RUS 2.9% 3.3%
COL 2.8% 4.3%
SGP 2.6% 2.8%
MEX 2.5% 3.9%
CHI 2.4% 2.8%
SWE 2.3% 1.8%
AUS 2.1% 2.1%
ARG 2.0% 2.9%
TLD 1.9% 2.8%
HUN 1.9% 1.7%
CZK 1.9% 1.9%
KOR 1.8% 1.3%
BRZ 1.7% 2.6%
USA 1.4% 1.5%
GBR 1.3% 1.1%
NLD 1.2% 0.9%
JPN 1.2% 1.1%
CAN 1.2% 1.3%
PRT 1.1% 0.9%
BEL 0.9% 0.2%
FRA 0.9% 0.3%
NOR 0.8% -0.2%
ESP 0.3% -0.2%
CHE 0.2% 0.2%
GRC 0.0% -0.1%
DEU -0.5% -0.7%
ITA -0.5% -1.1%

146
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Under the hood, there are two estimates here. We start by producing an estimate based on the same formula
for all countries (the Unadjusted value) and then correct for the average past error to produce our final estimate
(the error Adjusted Value). This additional step notes whether we were systematically over-optimistic or pessi-
mistic in our predictions for a given country and adjust for that to account for the fact that we may be missing
country-specific factors. We simply found how much the universal formula was off in the past on average (i.e.,
1%) and assumed it would be off by that amount for the next ten years. That adjustment is meant to account for
unexplained factors. These two estimates typically don’t yield meaningful differences and don’t affect the order
of the rankings much.

147
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

How We Came to Our Estimates

Because GDP is just output per worker times the number of workers, our estimate comprises two major
pieces: the expected change in workers and the estimated growth per worker.
Expected Change in Workers
Below we show our expected change in workers by country. You can see how emerging markets generally
see a favorable tailwind from workforce growth, while Europe, Russia and Japan’s challenges are compounded
by an aging and shrinking workforce.

ESTIMATED ANNUAL CHANGE IN WORKING AGE POPULATION

Working Age Population Growth Estimate
-1.6% 0 1.6%

SAR 1.6%

SAF 1.0%

IND 0.9%

ARG 0.8%

MEX 0.8%

UAE 0.8%

IDR 0.7%

AUS 0.6%

COL 0.5%

GBR 0.4%

TUR 0.4%

SWE 0.4%

CAN 0.3%

CHI 0.2%

USA 0.2%

NOR 0.1%

BRZ 0.1%

CZK 0.0%

FRA -0.1%

BEL -0.2%

NLD -0.2%

SGP -0.2%

RUS -0.3%

CHE -0.3%

CHN -0.4%

HUN -0.5%

PLD -0.6%

ESP -0.7%

TLD -0.7%

JPN -0.8%

PRT -0.8%

GRC -0.9%

DEU -1.1%

ITA -1.1%

KOR -1.2%

148
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Estimated Growth Per Worker

Then, below we show our estimate of expected growth per worker, and a breakout of our final, error adjusted
estimates and our unadjusted estimate across countries.

AGGREGATE ESTIMATE OF FUTURE GROWTH

PER WORKER (10 YEARS)
Growth Estimate (Error Adjusted) Error Un-
0.0% 5.3% Adjusted adjusted

IND 5.3% 7.1%

IDR 4.8% 6.1%

UAE 4.8% 5.0%

CHN 4.3% 4.0%

TUR 3.6% 3.7%

PLD 3.5% 3.1%

RUS 3.1% 3.6%

SAR 3.0% 3.8%

KOR 3.0% 2.5%

SGP 2.8% 3.1%

TLD 2.7% 3.5%

HUN 2.4% 2.2%

COL 2.3% 3.8%

CHI 2.2% 2.6%

JPN 1.9% 1.9%

SWE 1.9% 1.5%

SAF 1.9% 3.5%

PRT 1.9% 1.7%

CZK 1.8% 1.9%

MEX 1.7% 3.1%

BRZ 1.6% 2.5%

AUS 1.5% 1.5%

NLD 1.4% 1.0%

USA 1.2% 1.3%

ARG 1.2% 2.1%

BEL 1.1% 0.3%

FRA 1.0% 0.4%

ESP 1.0% 0.6%

GBR 0.9% 0.7%

GRC 0.9% 0.8%

CAN 0.9% 1.0%

NOR 0.6% -0.4%

ITA 0.6% -0.0%

DEU 0.6% 0.4%

CHE 0.5% 0.5%

149
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Productivity
Next, below we show our estimated impact of productivity on future growth and a breakout of our final,
error adjusted estimates and our unadjusted estimate across countries.

ESTIMATED PRODUCTIVITY IMPACT ON FUTURE GROWTH

Productivity
0.0% 6.1%

IND 6.1%

IDR 5.0%

CHN 5.0%

TUR 4.5%

UAE 4.2%

SGP 3.7%

KOR 3.6%

SAR 3.3%

RUS 3.2%

TLD 3.0%

COL 2.7%

PLD 2.7%

JPN 2.6%

CHI 2.5%

HUN 2.4%

SWE 2.3%

SAF 2.2%

ARG 2.1%

MEX 1.9%

BRZ 1.6%

USA 1.6%

GBR 1.6%

NLD 1.5%

PRT 1.5%

CZK 1.2%

FRA 1.1%

DEU 1.1%

AUS 1.0%

GRC 0.9%

BEL 0.9%

ESP 0.9%

CAN 0.8%

CHE 0.4%

ITA 0.3%

NOR 0.2%

150
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Indebtedness
Finally, below we show our estimated impact of indebtedness on future growth and a breakout of our final,
error adjusted estimates and our unadjusted estimate across countries.

ESTIMATED INDEBTEDNESS IMPACT ON FUTURE GROWTH

Impact (Error Adjusted) Error Un-
-5.2% 0 5.2% Adjusted adjusted

UAE 5.2% 5.7%

IDR 4.4% 5.0%

PLD 4.3% 4.1%

IND 3.8% 4.0%

CHN 3.1% 1.4%

RUS 2.7% 3.2%

PRT 2.6% 2.6%

AUS 2.5% 2.4%

CZK 2.1% 2.7%

TLD 2.0% 2.0%

TUR 2.0% 2.1%

HUN 1.9% 1.5%

SAR 1.8% 3.7%

KOR 1.8% 0.9%

CHI 1.6% 1.7%

COL 1.5% 3.1%

BEL 1.5% 1.2%

NOR 1.4% 1.2%

MEX 1.4% 2.9%

ESP 1.3% 1.4%

NLD 1.3% 1.2%

SWE 1.3% 1.0%

SGP 1.2% 1.2%

BRZ 1.1% 2.2%

ITA 1.1% 1.3%

SAF 1.0% 3.1%

CAN 1.0% 1.3%

CHE 1.0% 1.0%

FRA 0.9% 1.0%

JPN 0.7% 0.5%

GRC 0.7% 1.0%

USA 0.4% 0.5%

DEU -0.3% 0.0%

GBR -0.4% -0.3%

ARG -0.6% 1.0%

151
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Tying it All Together

Under the hood, our future growth per worker estimate includes two major components: a productivity
estimate, and an indebtedness estimate. Below we show how these two components add up to our growth per
worker estimate. You can see that emerging countries generally have higher expected productivity growth given
the labor arbitrage between emerging and developed countries. Emerging markets generally also have more
room to leverage up, while much of the developed world is deleveraging and has limited room for spending and
income growth from credit expansion.

ESTIMATE OF FUTURE GROWTH PER WORKER

(OVER NEXT 10Y)
Productivity Indebtedness Growth Per Worker Estimate
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
IND
IDR
UAE
CHN
TUR
PLD
RUS
SAR
KOR
SGP
TLD
HUN
COL
CHI
JPN
SWE
SAF
PRT
CZK
MEX
BRZ
AUS
NLD
USA
ARG
BEL
FRA
ESP
GBR
GRC
CAN
NOR
ITA
DEU
CHE

152
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PRODUCTIVITY AND COMPETITIVENESS MEASURES

Expected productivity growth is the main component of our growth per worker estimate—we put 2/3
weight on it. Here we briefly describe this measure. There is more detail on how we’re constructing these in
the appendix.
Our productivity measure is based primarily on how competitive a country’s economy is, and how cul-
ture is either buoying up growth beyond what productivity would suggest or holding it back.
A country’s competitiveness is driven by the value of all that it offers relative to the value of what others
offer—most importantly the value of its people relative to their cost. In a global economy, countries that are
more productive will not only produce better value products, but they will also attract investment and new
businesses, and they will compel the means of production to move. We expect the producers who are more
competitive to both 1) sell more in their own country and other countries, and 2) move their production to
countries where they can produce more cost-effectively.
As explained, the most important way countries differentiate themselves is through their labor: whether it is
more attractive for a company to hire their workers than to hire workers in a different country. This is not just
a function of whether the workers are more productive today. It’s a function of the attributes that make them
more attractive to hire and invest in over the long term. Since ultimately the only way one can become more
productive is through working harder or working smarter, it makes intuitive sense to us that education and
work ethic are the most important attributes that matter. Those countries that offer these most cost-competi-
tively tend to do the best. A country may also be more attractive because it’s a cheap place to build a factory or
because the returns of building new capital and technologies are higher. Additionally, countries that save and
invest more tend to grow faster by creating new innovations, capital equipment, and infrastructure that help
improve the productivity of their workforce relative to other countries with more limited investment rates.
These are the most important ingredients for the productivity growth of a country. But that’s not all there is
to it. Partly, culture drives the decisions people make about factors like savings rates or how many hours they
work each week. But culture can also help explain why a country can appear to have the right ingredients for
growth but consistently underperform.
Culture matters a lot. Ultimately how a country develops is a function of human behavior and the decisions
its people make. Many of those decisions are captured in the attributes that go into a country’s relative pro-
ductivity (like how much people save or how hard they work). But you can learn a lot about the psychology of
the different players in the economy and their motivations by staring at different cultural elements. Over very
long stretches of time a country’s cultural evolution is at the core of its long-term cycles (from being poor and
believing it’s poor to becoming rich).
Over any decade, the way we think about culture is that it can help explain why a country can appear to
have the right ingredients for growth but consistently underperform or outperform. For us it makes intuitive
sense that countries that emphasize individual self-reliance and striving to achieve are more likely to succeed
by creating a meritocratic environment where incentives are based largely on market forces. Countries can also
outperform if they are more innovative in producing new products and ideas of value and more commercially
minded in harvesting them. On the other hand, countries can underperform if they are corrupt or bureaucratic,
or if the rule of law is unsound. To be clear, we are not assessing whether one culture is good or bad; our focus
is on the cultural elements that are most important for economic prosperity.

153
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

OUR PRODUCTIVITY GAUGE

In this section, we briefly lay out how we go from the above framework to a specific number for expected
growth due to productivity.
When we look at gauging the productivity of a country we create a measure of 1) the relative value it offers
and 2) its culture. We weigh the relative value of a country the most since it is the most important determinant.
Our productivity gauge is just based on the logic we have described. It is mostly a function of the relative
value of a country’s workers (the labor arbitrage aspect): how educated they are relative to their cost and how
hard the people work relative to their cost. These measures give us a sense of whether a country’s workers have
the ingredients to grow their productivity by working harder or smarter. To triangulate the cost of an educated
worker we look at two measures, one that adjusts for the quality of education and one that looks at their ob-
served productivity today. Moving beyond a country’s human capital, we also look at investment relative to the
cost, which gives us a lens into whether a country is investing to grow its productivity in the future and whether
the returns are likely to be attractive (i.e., another perspective on the “cost of production arbitrage”).
To measure culture, we create a gauge for each of the concepts we have outlined: 1) whether a country values
self-sufficiency, 2) whether it values savoring the fruits of life or achieving, 3) whether it is innovative and com-
mercially oriented, 4) its degree of bureaucracy, 5) corruption, and 6) rule of law. Self-sufficiency encourages
productivity by tying the ability to spend to the need to produce. The concept of savoring life versus achieving
captures how much the people in a country are focused on enjoying the things they have versus trying to in-
crease their success and achieve, earn, and create more. Innovation and commercialism capture whether a soci-
ety is oriented toward seeking profit or generating new insights. The last three get at the basic questions of how
difficult it is to get business done in a country—i.e., whether a given country is one where businesses could get
off the ground and operate smoothly, where business can be conducted fairly (without corruption), and whether
investors and businesses can be confident that contracts and laws will be well enforced.
Together our indicators of productivity were 74% related to countries’ subsequent growth rates. To repeat,
these estimates were made by applying the exact same factors to all countries in all time periods to determine
their subsequent growth. Below, we again lay out the major gauges that feed into our growth estimate as well
we how we are weighting these.

154
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PRODUCTIVITY COMPONENTS

Reasoning Corr. to Growth Weight

Productivity (vs. similar income countries) Producing more by working harder or smarter 64% 65.0%
Culture influences the choices people make and the effectiveness
Culture 49% 19.5%
of an economic system
Corruption Corruption deters investment and distorts market incentives 50% 3.3%

Bureaucracy Lots of red tape and regulation stymies business activity 21% 3.3%
Investors and businesses need to feel secure their agreements and
Rule of Law 38% 3.3%
property will be protected
Those who value achievement will be more successful in finding
Savoring Life vs Achieving 40% 3.3%
ways to be more productive
Countries that value new ideas and invest in them will find new
Innovation 36% 3.3%
better ways to produce faster
The ability to independently support oneself is healthy and
Self Sufficiency 32% 3.3%
important to being successful
Countries that offer the most value for money do better than those
What You Pay vs. What You Get 60% 45.5%
that don't
A better educated worker will be more effective today and offers
Education 64% 11.4%
more promise for tomorrow
Workers of similar education producing more in the same amount
Labor Productivity 49% 11.4%
of time are more attractive
Hard workers will generally produce more and find ways to
Working Hard 61% 11.4%
improve faster
Countries that save and invest in productive capital and
Investing 51% 11.4%
infrastructure improve their potential

155
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

Breakdown of Productivity Based Growth

The chart below gives a picture of how we would rate countries today on productivity based on the same
logic described above. Our ratings are represented in terms of what a given country’s productivity would imply
for that country’s future growth in income per worker over the next 10 years. The different color bars show how
impactful our assessment of value is for each country (i.e., what you pay for what you get) and whether culture
is a support to or drag on income growth.

ESTIMATE OF FUTURE PRODUCTIVITY GROWTH

(OVER NEXT 10Y)
What You Pay vs. What You Get Culture Productivity Estimate

4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
IND
IDR
CHN
TUR
UAE
SGP
KOR
SAR
RUS
TLD
COL
PLD
JPN
CHI
HUN
SWE
SAF
ARG
MEX
BRZ
USA
GBR
NLD
PRT
CZK
FRA
DEU
AUS
GRC
BEL
ESP
CAN
CHE
ITA
NOR
For a fuller description of the components that make up our estimates, please see the appendix. Next, we walk through our health indices for each country.

156
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PART 2: ECONOMIC HEALTH INDICES

BY COUNTRY, AND THE PROGNOSES THAT THEY IMPLY

While in Part 1 I explained how the economic health index worked, in this part I break it down country by
country. By turning to the countries that you are interested in, you will be able to see all of the influences and
what they imply for economic growth over the next 10 years for each of those countries in one simple table.
They are shown in the order of projected economic growth rates and can be found by looking at the table of
contents on the next page.
The projected economic growth rates for each country are shown and attributed to a) the average annual
growth rate of the working population and b) the projected average annual change in the output per worker.
The projected change in the average annual output per worker is determined two-thirds by that country’s pro-
jected productivity growth and one-third by the size of its debt burdens. The determinants of each country’s
productivity growth are shown in several gauges that reflect each of the drivers (e.g., cost competitiveness, work
attitudes, etc.). These are conveyed in tables that show: 1) the deviation of that country’s determinant from the
world average (shown in standard deviation terms), and 2) the ranking of that country (among the 20 countries
shown) for that indicator. In other words, this one simple table will provide you virtually all that you need to
know to gauge each country’s economic health and its prospects for the next 10 years. By scanning the table and
reading the accompanying text, you will be able to see a country’s biggest strengths and biggest weaknesses.
The projections do not take into consideration exogenous factors such as the discoveries of natural resources and
wars which will influence growth rates and are beyond my ability to forecast.
The table will not provide the thinking or the individual statistics that are behind each of these gauges.
Should you wish to see a deeper explanation of the thinking behind each indicator or the individual statistics
behind these gauges, you can find them in the appendix. Unfortunately, we are not able to share the statistics
underlying our indebtedness measures, which are proprietary.
To be clear, these health indicators show where the current conditions will lead, not what is inevitable. If
countries change the influences on their health, like individuals who stop smoking and start exercising, they
can improve their prognoses. In fact, while we expect the countries that are more efficient (as measured by our
gauges) to do better than those that are less efficient, we expect those that remove their impediments to have
the biggest improvements to growth—just as China’s strong growth over the last couple decades resulted from
it ending its closed-door policy.
It should be noted that there was no subjective judgment used in coming up with these numbers, or even in
coming up with the text that explains these indicators. Both the numbers and the text were computer gener-
ated. As explained in Part 1 my process of converting indicators into health gauge measures and in turn into
projections for growth is very straightforward. To help it to be better understood and to provide each person
with their own abilities to vary the processes in the ways they prefer, I am willing to make these statistics and
processes open to those who are interested so that they can assess the relationships and change the weights in
the ways they think are best.
Below you’ll find more detailed descriptions of the pieces we used to construct our productivity gauge. We
suggest skimming this section, perhaps tracking how a particular country does through the different metrics.

157
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

WHAT YOU PAY VS. WHAT YOU GET

As previously discussed, a country’s productivity and competitiveness are mostly a function of the relative
value it offers, especially for its labor. As shorthand for this, we refer to our gauge of this relative value as “what
you pay versus what you get”; it reflects a) the cost and value of employees and b) the levels of investment.
Countries that have well-educated workers that are relatively inexpensive and that have higher investment rates
grow faster than those that don’t.
To construct this gauge we first looked at the average cost of an educated worker, adjusted for the average
hours worked (including the average workweek, vacation time, and holidays) and adjusted for the quality of ed-
ucation (based on international tests). We also created a gauge of the productivity-adjusted cost of labor (a spot
picture of how much workers offer relative to what you pay). And we created a gauge of working hard, where we
look at the portion of the population working, and then how many hours each of those workers puts in (again
adjusting for things like vacation). In addition, this gauge considers demographic shifts that change according
to how much that society is of working age relative to those who are very young or old and dependent. We
weighted these equally. This gives us perspective on the cost and value of employees. We also added in a gauge
of savings and investment that was also weighted equally. As shown in the correlations, all of these measures
were individually highly effective predictors of future growth, as was the aggregate of them. Most interesting
are the individual country rankings by measure, which are shown in the charts that follow. We suggest picking
a few countries that you are most interested in and seeing where they stand in these rankings. As we progress
through the charts in this section, clear pictures will emerge.

Corr. to Growth Weight

What You Pay vs. What You Get 60% 70.0%

Education 64% 17.5%

Cost of Quality Adjusted Educated Worker 64% 17.5%

Relative to the USA
Labor Productivity 49% 17.5%

Cost of a Prod. Adj. Educated Worker 49% 17.5%

Working Hard 61% 17.5%

Avg Hours Worked 62% 11.7%

Change in Dependency Ratio (10Yrs Fwd) 40% 5.8%

Investing 51% 17.5%

Investment Pct 48% 3.1%

Savings Rate 44% 3.1%

Income Volatility 14% 2.6%

Inflation Volatility -21% 2.6%

Productivity of Capital Investments 21% 3.1%

Growth in Capital Stock 35% 3.1%

158
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

WHAT YOU PAY VS. WHAT YOU GET

IMPACT ON FUTURE GROWTH
What You Pay vs. What You Get
-7.2% 0 7.2%

IND 7.2%

IDR 5.6%

TUR 4.5%

COL 4.4%

CHN 4.3%

RUS 4.0%

SAF 4.0%

TLD 3.7%

BRZ 3.7%

MEX 3.7%

ARG 3.4%

SAR 3.2%

HUN 3.1%

UAE 3.1%

PLD 3.1%

CHI 3.0%

SGP 2.3%

KOR 2.3%

CZK 2.3%

JPN 2.2%

GRC 2.0%

PRT 1.9%

SWE 1.3%

USA 1.2%

AUS 1.2%

ESP 1.2%

CAN 1.1%

GBR 1.1%

ITA 1.0%

FRA 0.8%

BEL 0.7%

NLD 0.5%

DEU 0.5%

CHE -0.4%

NOR -0.9%

159
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

A SIMPLE MEASURE OF COST: PER CAPITA INCOME

To make any assessment of value we want to look at the attributes of a country relative to their costs. Absent
other indications of productivity or indications of what you get for workers, we’d expect relative income levels
alone to give you some indication of a country’s relative future growth, albeit a naïve one. Through time, coun-
tries with cheap workers and low skills can leverage existing technology to increase their productive ability.
Similarly, the richest countries generally do not continue to outperform the rest of the world, as their competi-
tive advantages are eaten away by technology transfers to less competitive economies, and the normal behavior
of most economies is to increasingly savor the fruits of success by working and investing less.
Our measure of cost simply compares the nominal GDP per capita of a given country relative to the de-
veloped world average in log terms, which we believe is more reflective of the impact of differences in income
levels. That’s based on our intuition that, from a competitiveness perspective, a $2,000 difference is more
meaningful between one country that makes $500 and one that makes $2,500 than between countries that
make $40,000 and $42,000. Again, this measure of cost is one side of the picture. We combine it with our
assessment of various indications of what a country offers to understand its productivity and competitiveness
(what it offers relative to its cost).

160
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

PER CAPITA INCOME DATA AND SCORES

NGDP per Capita (USD in thousands) Calculated Score
0.0 101.1 -4.00 0 4.00

IND 2.5 IND

IDR 4.8 IDR

SAF 6.2 SAF

TLD 7.0 COL

COL 7.9 TLD

BRZ 10.0 ARG

ARG 10.4 BRZ

CHN 12.7 TUR

MEX 14.8 CHN

TUR 14.8 MEX

RUS 14.9 RUS

CHI 16.3 CHI

PLD 22.7 PLD

HUN 23.0 HUN

GRC 24.3 GRC

PRT 29.1 PRT

JPN 30.8 CZK

CZK 32.5 SAR

SAR 33.1 ESP

ESP 34.5 JPN

KOR 35.6 KOR

ITA 38.9 ITA

FRA 47.0 FRA

GBR 51.2 GBR

UAE 54.0 DEU

DEU 55.1 UAE

CAN 55.3 BEL

BEL 55.5 CAN

SWE 57.1 SWE

NLD 66.6 NLD

AUS 67.6 AUS

USA 83.1 USA

NOR 87.4 SGP

SGP 91.6 NOR

CHE 101.1 CHE

161
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

EDUCATION

Our single best measure of productivity is the relative cost of a country’s educated workforce adjusted for
the quality of that education. To construct our measure we look at the relative cost of different cohorts of edu-
cated and uneducated workers (e.g., college, high school, those without education), allowing us to get closer to
the individuals where the competition occurs. We can then look at the average cost of those workers per hour
worked (adjusting for differences like vacation). Further, we take into account the quality of education in one
country versus another (e.g., if a high school graduate in the US costs the same as one in France, we also want to
ask whether the quality of high school education is the same in both countries). For this adjustment, we use an
internationally accepted measure of education quality. That allows us to compare for a given cohort the relative
quality of workers’ education compared to the relative cost. To come up with an aggregate measure for a country
we weight proportionally how much of its population is in each group because if a country’s workforce is highly
educated, then most of the labor competition happens with other countries at those levels (e.g., between drug
researchers in the US and their peers in Germany). Of course we recognize there is some labor arbitrage across
cohorts, but this approach lets us capture the dynamic reasonably well.

162
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

EDUCATION SCORES
Score Relative to Countries w/ Similar Income
-4.00 0 4.00

IND

IDR

CHN

COL

RUS

MEX

BRZ

ARG

CHI

TLD

TUR

PLD

KOR

HUN

UAE

SGP

JPN

SAR

CZK

GRC

CAN

PRT

GBR

ESP

USA

AUS

ITA

SWE

DEU

BEL

FRA

NLD

CHE

NOR

163
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

COST OF QUALITY-ADJUSTED EDUCATED WORKER

Adj. for Education Quality (USA = 0%) Non-Adj. for Education Quality (USA = 0%)
-106% 0 106% -106% 0 106%

IND -92% IND -95%

IDR -85% IDR -89%

CHN -83% COL -87%

COL -83% SAF -85%

RUS -82% RUS -83%

MEX -75% CHN -82%

BRZ -73% MEX -81%

ARG -71% BRZ -79%

CHI -70% TLD -75%

TLD -69% CHI -71%

TUR -67% ARG -71%

PLD -66% TUR -69%

KOR -65% PLD -65%

HUN -63% UAE -65%

UAE -58% HUN -63%

SGP -53% KOR -61%

JPN -52% SAR -59%

SAR -45% GRC -45%

CZK -42% JPN -43%

GRC -37% SGP -43%

CAN -17% CZK -39%

PRT -13% PRT -15%

GBR -12% CAN -13%

ESP -6% GBR -9%

USA 0 0% ESP -8%

AUS 4% USA 0%

ITA 4% ITA 1%

SWE 13% AUS 8%

DEU 33% SWE 13%

BEL 38% DEU 31%

FRA 59% BEL 39%

NLD 64% FRA 55%

CHE 92% NLD 60%

NOR 106% CHE 94%

NOR 106%

164
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

LABOR PRODUCTIVITY

To triangulate our picture of the cost of an educated worker, we also look at the cost adjusting for observed
differences in productivity (output per hour worked) rather than education quality. With this measure, we take
the same approach of looking at the cost of the different cohorts. By adjusting for differences in observed pro-
ductivity today we can get a better sense of the effective cost. Imagine you hire two workers of the same cost:
one has a better education, but the other is more productive from day one on the job.

COST OF A PRODUCTIVITY
ADJUSTED EDUCATED WORKER
Cost vs. USA (USA = 0%)
-97% 0 97%

TUR -97%

IND -95%

IDR -90%

COL -89%

RUS -87%

SAF -87%

HUN -87%

BRZ -84%

SAR -82%

PLD -81%

MEX -80%

ARG -80%

UAE -79%

TLD -78%

CHI -78%

CHN -78%

SGP -66%

KOR -65%

CZK -61%

GRC -60%

JPN -52%

PRT -41%

ESP -38%

ITA -26%

CAN -22%

SWE -21%

DEU -18%

GBR -17%

BEL -5%

FRA -1%

USA 0%

AUS 0%

NLD 2%

NOR 20%

CHE 81%

165
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

WORKING HARD

Just like hardworking individuals, hardworking countries will generally be more productive and find ways to
improve faster than those that are less hardworking. We believe a country’s work ethic impacts both the level of
its relative advantage today and the pace at which it learns and improves over time. Working hard doesn’t just
mean working a lot of hours; it means having a certain ethic, a determination to achieve quality outcomes, and
to improve. Demographics can also impact the work ethic of a society—when a society ages and the number of
dependents rises relative to those in the workforce, it can impact the overall work ethic of the society. Similarly,
when there is a boom of young professionals, it can improve the vibrancy, initiative, and determination of the
society. We expect a country with a hardworking society that is low-cost to be more competitive and grow
faster than a country with a population that prefers leisure and is expensive.
To construct a simple measure of working hard, we look at two pieces: 1) average weekly hours of actual
work by men in the labor force, adjusting for things like vacation time and holidays, and 2) shifts in the amount
of the population as a whole that is working. While the number of hours worked is just one measure of the ef-
fort a country puts in, and doesn’t account for the determination and effort put in during those hours, it gives us
a decent starting point; we return to some other measures that triangulate our picture when we look at culture.

166
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

WORKING HARD SCORES

Score Relative to Countries w/ Similar Income
-4.00 0 4.00

IND

IDR

MEX

CHN

UAE

ARG

SAR

COL

TLD

RUS

TUR

CHI

SAF

PLD

BRZ

SGP

HUN

CZK

JPN

KOR

GBR

GRC

SWE

PRT

AUS

USA

CAN

BEL

FRA

ESP

ITA

NOR

CHE

NLD

DEU

167
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INVESTING

Countries that save and invest in their future tend to grow faster by creating capital equipment and infrastruc-
ture that helps improve the productivity of their workforce relative to other countries with more limited investment
rates. Further, high rates of savings provide the capital needed to invest in the most innovative companies. Of
course, there are always risks that this investment is unproductive. Typically, the investments that yield the most
productivity gains occur in emerging countries that are just becoming rich. At this stage, the investments are not
just inexpensive; the stock of infrastructure and other physical capital is also typically low and there is lots of room
to adopt existing technologies that can radically improve the country’s potential. Investing is measured by looking
at 1) the rate of total non-residential fixed investment in a given economy and 2) the household savings rate.

INVESTING SCORES
Score Relative to Countries w/ Similar Income
-4.00 0 4.00

IND

IDR

CHN

SAF

TLD

BRZ

TUR

COL

RUS

SAR

HUN

PLD

CZK

CHI

JPN

MEX

PRT

ARG

KOR

UAE

SGP

GRC

ESP

ITA

AUS

FRA

SWE

USA

NLD

DEU

BEL

CHE

CAN

GBR

NOR

168
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CULTURE

Just looking solely at the relative value of a country’s workers misses the role that the culture plays in deter-
mining how much a country will grow. As I’ve discussed, culture influences the decisions people make about
factors like savings rates or how many hours they work each week, which we measure in the previously shown
indicators, but culture can also influence work attitudes, levels of efficiency, reliability, and other such influ-
ences on whether countries underperform or outperform. While some people shy away from examining culture
because it is perceived as a sensitive subject and/or difficult to measure, I think those views are mistaken. I don’t
see any reason why we shouldn’t look at culture objectively as we do any other element of an economy; also, it
can be well measured. I think that it’s unfortunate that this important influence on economic well-being has
not been well studied.
To be clear, I don’t mean to judge whether a culture is good or bad any more than I could judge whether
working hard is a better way to live one’s life than savoring the pleasures of life. I am, however, confident that
people who prefer savoring life over working hard will work and produce differently in ways that we should un-
derstand. Similarly, it makes intuitive sense that countries that emphasize individual self-reliance and striving
to achieve are more likely to succeed than countries that don’t. Countries can also outperform if the people in
them are more innovative in producing new products and ideas of value and are more commercially minded
in harvesting them. On the other hand, it makes sense that countries will underperform if they are corrupt,
bureaucratic, or if the rule of law is unsound. In this section we will look at the relationships between measures
of such factors and future growth, and we will examine how different countries stack up against these measures
and what that implies for their future growth rates.

Corr. to Growth Weight

Culture 49% 30.0%

Corruption 50% 5.0%

Surveys of Corruption 61% 2.5%

Transparency Index -18% 2.5%

Bureaucracy 21% 5.0%

Starting a Business -33% 1.7%

Construction Permits -34% 1.7%

Burden of Govt Regulation 24% 1.7%

Rule of Law 38% 5.0%

Efficiency of Legal Frameworks 3% 1.3%

Property Rights -30% 1.3%

Protecting Investors Value -3% 1.3%

Enforcing Contracts -6% 1.3%

Savoring Life vs Achieving 40% 5.0%

Observed Outcomes 10% 2.5%

Expressed Values 9% 2.5%
Innovation 36% 5.0%
Innovation Inputs 49% 2.5%
Innovation Outputs 33% 2.5%
Self Sufficiency 32% 5.0%
Hard Work 34% 2.5%
Government Support 20% 1.3%
Rigidity of Labor Market 7% 1.3%

169
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CULTURE IMPACT ON FUTURE GROWTH

Culture

Culture
-1.7% 0 1.7%

SGP 1.7%

IND 1.6%

UAE 1.5%

CHN 1.1%

IDR 1.0%

KOR 1.0%

TLD 0.6%

SAR 0.6%

CHE 0.5%

USA 0.5%

JPN 0.4%

NLD 0.4%

SWE 0.4%

GBR 0.2%

CHI 0.1%

TUR 0.1%

DEU 0.0%

AUS -0.2%

RUS -0.2%

CAN -0.2%

SAF -0.3%

COL -0.3%

NOR -0.3%

MEX -0.4%

PLD -0.5%

HUN -0.5%

FRA -0.6%

PRT -0.7%

ARG -0.8%

BEL -0.8%

CZK -0.9%

BRZ -1.0%

ESP -1.1%

GRC -1.3%

ITA -1.7%

170
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CORRUPTION

Corruption undermines the effectiveness of a market-based system in a variety of ways, diverting resources,
distorting incentives, raising the costs of doing business, undermining business competition and efficiency,
and creating uncertainty for investment. Corruption also both discourages profit-seeking and often impedes
it. Small types of corruption (like the bribes one may have to pay at the airport or to an administrative official)
create inefficiencies that slow down the agility of businesses, raise costs, and make it more difficult to cultivate
a new business. Big forms of corruption (for example, business appropriation) create limits to financial success
and others (like large bribes to enter an industry or win a license) create entry barriers and lower prospective
returns. All forms can make a country’s system dysfunctional and create uncertainty around doing business in
a given country. In all these ways corruption undermines productivity and the capacity of a society to realize
its potential.
To measure corruption, we combine Transparency International’s measures of corruption across countries
with three sub-indices from the World Economic Forum’s competitiveness index: “diversion of public funds,”
“irregular payments and bribes,” and “favoritism in decisions of government officials.” These measures help us
capture the different types of corruption (big and small). The pieces of our corruption indicator are shown in
the table below. When we look at these measures we see that poorer countries tend to have higher degrees of
corruption. That’s for a number of reasons we won’t explore in depth here, including fewer opportunities for
wealth creation, entrenched ways of operating that may have once been part of a different, non-market based
system, or weaker rule of law. Businessmen and investors will likely put up with a certain degree of corruption
to operate in an emerging country that is otherwise competitive. But if that country has an exceptionally high
degree of corruption relative to countries of similar income, it is no doubt going to weigh on the decision to do
business in that country. Notably, the relationship is slightly negative without this adjustment. Along with our
measures of bureaucracy and the rule of law, this gauge helps us triangulate the picture of how hard it is to do
business in a country.

Corr. to Growth Weight

Corruption 50% 16.7%

Surveys of Corruption 61% 8.3%

Diversion of Public Funds -20% 2.8%

Irregular Payments and Bribes -17% 2.8%

Favoritism in Govt Decisions -9% 2.8%

Transparency Index -18% 8.3%

171
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

CORRUPTION SCORES
Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00

IND SGP

IDR CHE

CHI NLD

JPN NOR

UAE SWE

SWE UAE

CHN DEU

NLD AUS

SGP GBR

GBR JPN

DEU CAN

TLD BEL

SAF USA

COL FRA

TUR CHI

PRT SAR

CAN PRT

NOR KOR

AUS CHN

FRA ESP

CHE PLD

SAR IND

ARG CZK

PLD ITA

BEL GRC

BRZ IDR

GRC TUR

USA TLD

KOR HUN

ESP SAF

RUS RUS

CZK ARG

MEX COL

HUN BRZ

ITA MEX

172
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

BUREAUCRACY

Lots of red tape and government regulation stymie business activity. They impact the core elements of a
thriving economy by hindering people from innovating or creating new businesses, and they make running
a business burdensome, requiring people to spend time complying with unnecessary or heavy administrative
controls instead of focusing on business improvements. That’s not to say that regulation is not important—of
course, good governance and the rule of law are critical to a healthy market-based economy, as we will examine
next. But excessive, time-consuming, and rigid controls gum up the wheels of the economy.
To measure bureaucracy we look at measures related to the ease of starting a business (from the World Bank/
IFC), the efficiency and cost of dealing with construction permits (also World Bank/IFC), and the burden of
government regulation (from the World Economic Forum). The pieces of our bureaucracy indicator are shown
in the table below. Bureaucracy tends to be more prevalent in less developed countries and so is fairly related
to income levels. This is fairly natural for a number of reasons, because the processes are simply less efficient
and require more steps, because the market systems are less advanced or established and have more controls,
or because of inter-related factors, like weaker rule of law and a higher degree of corruption leading to more
controls that allow for rent-seeking. From a growth perspective, businessmen and investors will likely accept
that a certain degree of bureaucracy is to be expected to do business in an emerging country that is otherwise
competitive. But if the bureaucracy is exceptional even relative to countries of similar income, it is no doubt
going to weigh on the decision to do business in that country.

173
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

BUREAUCRACY SCORES
Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00

IND SGP

UAE UAE

SGP SAR

CHN GBR

TLD USA

IDR CHN

SAR CHE

TUR NLD

GBR NOR

RUS DEU

JPN JPN

CHI CAN

USA AUS

SAF SWE

KOR TLD

DEU KOR

NLD IND

CAN FRA

COL TUR

SWE RUS

CHE CHI

AUS IDR

NOR BEL

FRA PRT

PRT PLD

MEX GRC

PLD ESP

HUN HUN

GRC MEX

BEL SAF

ARG COL

ESP ITA

ITA CZK

CZK ARG

BRZ BRZ

174
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

RULE OF LAW

A strong rule of law helps ensure fair competition in a market-based system and it protects the incentives
and efficiency of this system. When a country’s legal system can reliably and efficiently enforce agreements that
businesses make and protect people’s property and investments, the economy can function. If there are strong
disagreements, a contract broken, or a bankruptcy, a well-developed legal system makes working these things
out fair and orderly. When the government fails to do these things, investing and doing business in a country
is a lot riskier and inefficient. A strong rule of law also helps stamp out corruption and other activities that
discourage profit seeking and prevent the most highly valued products and businesses from thriving.
We measure rule of law by combining measures related to the efficiency of the legal framework in settling
disputes (WEF), property rights (WEF), protecting investors (World Bank/IFC), and enforcing contracts
(World Bank/IFC). The pieces of our rule of law indicator are shown in the table below. As with our measures
of corruption and bureaucracy, the rule of law tends to be strongly related to a country’s income. Again, we
won’t delve into all the reasons here, but it’s intuitive that countries that have less resources and less educated
populations have more immature legal systems, and the rule of law is likely compounded by interrelated factors,
like higher corruption. Here we want to look at the rule of law of a country taking into account its development
stage. That gives us a better sense of the underlying cultural elements that will determine its lawfulness as it
develops. It’s also a more helpful perspective in looking at future growth. As with our measures of bureaucracy
and corruption, we would expect that businessmen and investors will likely expect there to be lower rule of law
in poorer countries, and so it may not impact their decision to do business or invest in an emerging country that
is otherwise competitive. But if the rule of law is particularly weak in that country relative to others of similar
income, that is likely a drag.

175
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

RULE OF LAW SCORES

Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00
SGP SGP
TLD UAE
IND NOR
SAR SAR
UAE GBR
SAF USA
CHN AUS
JPN JPN
GBR CHE
IDR SWE
KOR KOR
NOR CAN
CHI NLD
TUR FRA
AUS DEU
SWE CHN
USA BEL
CAN TLD
FRA ESP
NLD CHI
DEU SAF
ESP TUR
CHE IDR
BEL PRT
RUS IND
COL CZK
MEX RUS
BRZ HUN
PRT PLD
ARG MEX
PLD BRZ
HUN ITA
CZK COL
GRC ARG
ITA GRC

176
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SAVORING LIFE VS ACHIEVING

It makes intuitive sense to us that those who value achievement over savoring the fruits of life will be more
successful in finding ways to work harder and smarter to become more prosperous. Of course achievement
means different things to different people. When I talk about a society that values achievement I imagine one
where its people prioritize professional success, creating thriving businesses and building economic security
versus other goals like enjoying leisure. What’s more, these societies tend to be ones where there is a faith that
competition is fair and hard work will be rewarded (otherwise it’s less likely for the people to be motivated).

Corr. to Growth Weight

Savoring Life vs Achieving 40% 16.7%

Observed Outcomes 10% 8.3%

Average Hours Worked 57% 8.3%

Expressed Values 9% 8.3%

Children Having Responsibilities is Important -17% 1.2%

Growth is Important for the Future of a Country 74% 1.2%

Having a Good Time is Important 15% 1.2%

Importance of Being Successful 59% 1.2%

Economic Growth should be a Priority 18% 1.2%

over the Environment
Competition is Not Harmful to Business 30% 1.2%

Hard Work Leads to Success 28% 1.2%

177
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SAVORING LIFE VS ACHIEVING SCORES

Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00
UAE UAE
SGP IND
SAR SAR
IND SGP
CHN IDR
USA CHN
IDR MEX
MEX KOR
KOR USA
JPN RUS
PLD PLD
AUS TLD
RUS TUR
SWE JPN
CAN SAF
TUR COL
DEU ARG
HUN HUN
NOR AUS
TLD SWE
CHE CAN
CZK CHI
GBR CZK
COL DEU
ESP ESP
NLD BRZ
SAF GBR
CHI NOR
ARG NLD
ITA PRT
PRT CHE
BRZ ITA
FRA GRC
BEL FRA
GRC BEL

178
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INNOVATION

An innovative and commercial spirit is the lifeblood of a thriving economy. The drive to tinker and invent,
to discover, to improve from prior failures—this is how people learn and find new and better ways of creating
things of value. In a market-based system, the most powerful way to drive innovation is to bring new ideas to
market and to commercialize and profit from them. The marketplace is generally efficient in weeding out the
good ideas from the bad and pricing which innovations are most valued by society. In this way, the concepts of
innovation and commercialism go hand in hand. They capture whether people in a society value finding new
knowledge or creating new things, and whether their incentives are aligned to encourage them to seek a profit
by commercializing these ideas. The following statistics measure the level of innovation and commercialism in
different countries and their correlations with future growth.
We looked at a variety of measures to triangulate these concepts. For both scientific and commercial inno-
vation, we wanted to have a balance between indicators that captured outputs (new inventions or businesses),
and indicators that measured inputs (values, investment, and people) that we thought would logically lead to
innovation. We weigh the inputs and outputs equally. The pieces of our innovation and commercialism indica-
tor are shown in the following table. Overall, the raw indications of innovation and commercialism are stronger
in higher-income countries, especially measures of investment (like R&D expenditure) that require a certain
level of resources, or measures of knowledge creation (like patent creation) that require a level of acquired
knowledge. What we are focused on with our culture measures, however, are the underlying values of a society
independent of its wealth and development stage (which we proxy in a simple way with income levels).

Corr. to Growth Weight

Innovation 36% 16.7%

Innovation Inputs 49% 8.3%

Gross expenditure on R&D -20% 1.0%

Researchers -28% 1.0%

Fear of Business Failure 11% 1.0%

Entrepreneurship Prevalence 29% 1.0%

Innovation Outputs 33% 8.3%

# New Patents -33% 2.1%

Royalty and license fees, payments -36% 2.1%

# New Businesses -28% 1.0%

% of People Creating New Businesses 27% 1.0%

# New Major Websites -45% 1.0%

New Trademark Creation -21% 1.0%

179
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

INNOVATION SCORES
Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00

KOR KOR

CHE CHE

NLD SWE

SWE NLD

SGP USA

USA SGP

CHN JPN

DEU DEU

IND GBR

JPN FRA

IDR BEL

HUN NOR

GBR AUS

TLD CAN

TUR HUN

FRA CZK

CHI UAE

BEL PRT

COL TUR

BRZ GRC

RUS ITA

CZK CHI

PLD ESP

NOR CHN

AUS TLD

PRT BRZ

CAN PLD

SAF ARG

ARG IDR

GRC SAR

UAE RUS

ITA COL

ESP IND

SAR SAF

MEX MEX

180
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SELF-SUFFICIENCY

It is both logical and consistent with the evidence to believe that self-sufficiency (i.e., the need and the ability
to independently support oneself) is an important ingredient for individuals and societies to be successful. It is
not controversial to say that people spend the money that they earn differently than the money that others give
them—i.e., that the connection between earning and spending is a healthy one. If people have to earn money
to spend it, they have to be more productive. Over the long run, living standards rise as a function of increases
in productivity. So, it is not a big leap to presume that countries with greater amounts of self-sufficiency do
better than those with less. Since self-sufficiency creates capability and independence in addition to fostering
increased production, it also produces self-esteem. For these reasons, it is logical to conclude that self-reliance
is rewarding, both economically and psychologically. The evidence clearly shows this to be true.
Below, we show how self-sufficiency varies by country and how it has been correlated with subsequent eco-
nomic growth. You will see that there are significant differences in self-sufficiency levels between countries and
that these differences occur for different reasons. For example, in some cases they are chosen (e.g., the amounts
of transfer payments developed economies have are largely chosen) while in other cases they are not (e.g., high
self-sufficiency in the poorest societies is primarily the result of necessity rather than choice). Nonetheless, the
evidence is clear. Societies in which individuals are more responsible for themselves grow more than those in
which they are less responsible for themselves.

Corr. to Growth Weight

Self Sufficiency 32% 16.7%

Hard Work 34% 8.3%

Average Hours Worked 57% 4.2%

Labor Force Participation 29% 1.4%

Effective Retirement Age 23% 1.4%

Actual Vacation Days 32% 1.4%

Government Support 20% 4.2%

Transfer Payments to Households 46% 2.1%

Government Outlays 40% 2.1%

Rigidity of Labor Market 7% 4.2%

Collective Bargaining as Pct of Workforce 32% 1.4%

Ease of Hiring/Firing Index 30% 1.4%

Minimum Wage -6% 1.4%

181
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

SELF-SUFFICIENCY SCORES
Score Relative to Countries w/ Similar Income Score Relative to the World
-4.00 0 4.00 -4.00 0 4.00

UAE UAE

SGP SGP

SAR IDR

MEX SAR

IDR MEX

CHN IND

IND CHN

USA TLD

CHE KOR

KOR USA

TLD RUS

RUS ARG

CHI CHE

CAN COL

JPN CHI

AUS TUR

ARG JPN

COL HUN

CZK CAN

TUR CZK

NLD SAF

HUN PLD

GBR AUS

PLD GBR

NOR NLD

SAF BRZ

SWE NOR

BRZ PRT

DEU SWE

PRT DEU

GRC GRC

BEL ESP

ESP BEL

FRA FRA

ITA ITA

182
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

APPENDIX: DATA SOURCES

My goal in building these measures is to encourage thought about what policymakers intend to go after and
how best to measure their success. You may well think certain measures are more or less important than others
and want to weigh the indicators differently than me depending on your own goals. I would ideally like to give
you the tools to do so, by building my gauges in an open-source way.
I cannot directly share the data I am using, because many of the concepts are proprietary or for sale. Thus, in
this appendix, I wanted to share some of the helpful data sources I used. My overall index uses a few hundred
indicators—below I am sharing a selection in case you would want to obtain these directly.
# Indicator/Concept Used Data Sourced From

1 Access to Essential Health Services The Social Progress Imperative

2 Aerospace and Defense Sector Returns Thomson Reuters

3 Agriculture, Forestry & Fishing, Value Added World Development Indicators (World Bank)

4 Artificial Intelligence: # of New Companies, # of Patents, # of Citations Center for Security and Emerging Tech

5 Banking Claims in Country (By Currency & Source Country) Bank for International Settlements

6 Bloomberg Innovation Index Bloomberg

7 Book Titles Per Capita CLIO Infra

8 Child Mortality Rate The Social Progress Imperative

9 Climate Vulnerability and Preparedness Index & Subcomponents University of Notre Dame: Global Adaptation Initiative Index

10 CO2 Emissions CLIO Infra

11 Conflict Intensity and Count Per Capita Cline Center

12 Construction Permits Score World Bank - Doing Business Report

13 Days Lost To Labor Disputes CLIO Infra

14 Discontent, Populism, and Conflict Terms in Media The GDELT Project

15 Education Spending World Development Indicators (World Bank)

16 Educational Attainment Barro-Lee Educational Attainment Data

17 Electricity Production National Bureau of Economic Research: CHAT Dataset

18 Energy Production and Consumption The U.S. Energy Information Administration

19 Enforcing Contracts Score World Bank - Doing Business Report

20 GINI Coefficient World Development Indicators (World Bank)

21 Google Searches for Political Conflict Terms Google Trends

22 Google Searches indicating Economic / Political / Social / Emotional Discontent Google Trends

23 Government Disapproval & Verbal Opposition in News / Media The GDELT Project

24 Gross Expenditure on R&D WIPO Global Innovation Index

25 Historical Aviation Passengers & Cargo National Bureau of Economic Research: CHAT Dataset

26 Historical Technology Adoption (Milking Machine to Internet) National Bureau of Economic Research: CHAT Dataset

27 Homicide Rate The Social Progress Imperative

28 Hours Worked Per Week World Inequality Database

29 Human Capital Index World Bank

30 Income Distributions World Bank

31 Internal Armed Conflict CLIO Infra

32 Internet Users National Bureau of Economic Research: CHAT Dataset

33 Male Labor Force Participation Rate World Bank

34 Metals and Ores Production CLIO Infra

35 Nuclear Weapon Stockpile The Federation of American Scientists

183
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

# Indicator/Concept Used Data Sourced From

36 Number of New Patents WIPO Global Innovation Index

37 Numeracy CLIO Infra

38 OTC FX Turnover Bank for International Settlements

39 Particulate Matter Pollution The Social Progress Imperative

40 Patent Applications World Development Indicators (World Bank)

41 People Displaced by Conflict & Violence World Development Indicators (World Bank)

42 People Using Safely Managed Drinking Water Services World Bank

43 Prevalence of Undernourishment World Bank

44 Protecting Investors Value Score World Bank - Doing Business Report

45 Protest Intensity Index The GDELT Project

46 Public Sector Corruption & Theft Score V-DEM Institute

47 Rail Lines Opened and Rail Cargo National Bureau of Economic Research: CHAT Dataset

48 Real GDP Per Worker Penn World Tables

49 Real Growth Rate World Bank

50 Renewable Freshwater Resources World Development Indicators (World Bank)

51 Rigorous and Impartial Government Score V-DEM Institute

52 Royalty and License Fees WIPO Global Innovation Index

53 Share of Universities in Top 500 Shanghai Ranking Consultancy

54 Shipping Tonnage by Sail / Steam / Motor and in Total National Bureau of Economic Research: CHAT Dataset

55 Starting a Business Score World Bank - Doing Business Report

56 Suicide Mortality Rate World Bank

57 Tariff Rate World Bank

58 Top 1% and Top 10% Income Shares World Inequality Database

59 Top 1% and Top 10% Wealth Shares World Inequality Database

60 Total Labor Disputes CLIO Infra

61 Transparent Laws with Predictable Enforcement Score V-DEM Institute

62 Universities Founded CLIO Infra

63 # of New Businesses & # of People Creating New Businesses WIPO Global Innovation Index

64 # of New Major Websites WIPO Global Innovation Index

184
THE GREAT POWERS INDEX: 2024 | HOW THE LEADING 24 COUNTRIES ARE DOING AND THEIR PROSPECTS FOR THE NEXT 10 YEARS

IMPORTANT DISCLOSURES AND OTHER INFORMATION

Information contained herein is only current as of the printing date and is intended only to provide the observations and views of Bridgewater
Associates, LP (“Bridgewater”) as of the date of writing unless otherwise indicated. Bridgewater has no obligation to provide recipients hereof with
updates or changes to the information contained herein. Performance and markets may be higher or lower than what is shown herein and the infor-
mation, assumptions and analysis that may be time sensitive in nature can change materially and may no longer represent the views of Bridgewater.
Statements containing forward-looking views or expectations (or comparable language) are subject to a number of risks and uncertainties and are
informational in nature. Actual performance could, and may have, differed materially from the information presented herein. Past performance is
not indicative of future results.
Bridgewater research utilizes data and information from public, private, and internal sources, including data from actual Bridgewater trades.
Sources include BCA, Bloomberg Finance L.P., Bond Radar, Candeal, CBRE, Inc., CEIC Data Company Ltd., China Bull Research, Clarus
Financial Technology, CLS Processing Solutions, Conference Board of Canada, Consensus Economics Inc., DataYes Inc, Dealogic, DTCC Data
Repository, Ecoanalitica, Empirical Research Partners, Entis (Axioma Qontigo Simcorp), EPFR Global, Eurasia Group, Evercore ISI, FactSet
Research Systems, Fastmarkets Global Limited, The Financial Times Limited, FINRA, GaveKal Research Ltd., Global Financial Data, Glo-
balSource Partners, Harvard Business Review, Haver Analytics, Inc., Institutional Shareholder Services (ISS), The Investment Funds Institute
of Canada, ICE Derived Data (UK), Investment Company Institute, International Institute of Finance, JP Morgan, JSTA Advisors, M Science
LLC, MarketAxess, Medley Global Advisors (Energy Aspects Corp), Metals Focus Ltd, Moody’s ESG Solutions, MSCI, Inc., National Bureau
of Economic Research, Neudata, Organisation for Economic Cooperation and Development, Pensions & Investments Research Center, Refinitiv,
Rhodium Group, RP Data, Rubinson Research, Rystad Energy, S&P Global Market Intelligence, Sentix GmbH, Shanghai Wind Information,
Smart Insider Ltd., Sustainalytics, Swaps Monitor, Tradeweb, United Nations, US Department of Commerce, Verisk Maplecroft, Visible Alpha,
Wells Bay, Wind Financial Information LLC, Wood Mackenzie Limited, World Bureau of Metal Statistics, World Economic Forum, YieldBook.
While we consider information from external sources to be reliable, we do not assume responsibility for its accuracy. Data leveraged from third-party
providers, related to financial and non-financial characteristics, may not be accurate or complete. The data and factors that Bridgewater considers
within its investment process may change over time.
The views expressed herein are solely those of Bridgewater and are subject to change without notice. In some circumstances Bridgewater submits
performance information to indices, such as Dow Jones Credit Suisse Hedge Fund index, which may be included in this material. You should assume
that Bridgewater has a significant financial interest in one or more of the positions and/or securities or derivatives discussed. Bridgewater’s employees
may have long or short positions in and buy or sell securities or derivatives referred to in this material. Those responsible for preparing this material
receive compensation based upon various factors, including, among other things, the quality of their work and firm revenues.
This material is for informational and educational purposes only and is not an offer to sell or the solicitation of an offer to buy the securities or other
instruments mentioned. Any such offering will be made pursuant to a definitive offering memorandum. This material does not constitute a personal
recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors which are necessary
considerations before making any investment decision. Investors should consider whether any advice or recommendation in this research is suitable for
their particular circumstances and, where appropriate, seek professional advice, including legal, tax, accounting, investment or other advice.
The information provided herein is solely a guide to current expectations and not intended to provide a sufficient basis on which to make an invest-
ment decision and investment decisions should not be based on simulated, hypothetical or illustrative information that have inherent limitations. Sim-
ulated or hypothetical information are limited in part because they are based on a variety of criteria and assumptions, which might vary substantially.

185